Making Tax Digital for childminders: what's changing in April 2026

TL;DR: Making Tax Digital for Income Tax (MTD ITSA) hits self-employed UK childminders in three waves, based on qualifying income from self-employment and/or property: over £50,000 from 6 April 2026, over £30,000 from 6 April 2027, over £20,000 from 6 April 2028. Three things change for your business: digital records (the paper diary alone is no longer compliant), four quarterly updates per tax year (plus a Self Assessment tax return using compatible software), and compatible software to send the quarterly updates and submit the tax return. The time required varies with transaction volume, record quality and the software you use; the continuing duty is to keep accurate digital records and check the software-generated update. The shift is the rhythm: from a once-a-year January scramble to a four-times-a-year discipline.

Current HMRC rule: Each update is calculated by compatible software from digital records and covers cumulative category totals from the start of the tax year to the end of the update period - not only the previous three months. If record keeping and filing use different software, keep a permitted digital link between them; manual re-keying or clipboard transfer is not a digital link. HMRC will not apply penalty points for late quarterly updates in 2026/27, but the updates must still be sent before you submit your Self Assessment tax return using compatible software. Check HMRC digital-record guidance, quarterly-update guidance and HMRC's current MTD journey.

If you're a self-employed UK childminder, the headline news is short. MTD ITSA becomes mandatory in three steps, based on qualifying income from self-employment and/or property:

• From 6 April 2026 — qualifying income over £50,000.
• From 6 April 2027 — qualifying income over £30,000.
• From 6 April 2028 — qualifying income over £20,000.

That will catch many established childminders running full-week books, especially those topping up with school pick-ups, holiday clubs, or older-child after-school slots. If you also rent out a property, that rental income counts toward the same threshold.

The three real changes:

1. Digital records are required. Create and keep the required income and expense records in a structured digital format by the relevant update deadline. A spreadsheet can work when compatible software preserves the required digital links and can send the quarterly updates and tax return. Some cloud accounting software can handle both record keeping and filing; check HMRC's current compatible-software list and the provider's supported features. Paper or unstructured records can still be kept, but they are not enough on their own once MTD applies; the required records must also be created and kept digitally by the relevant deadline.
2. Four quarterly updates per tax year, plus your Self Assessment tax return using compatible software. Each update contains cumulative totals for the categories you use, from the start of the tax year to the update-period end. You make the relevant adjustments and complete the tax calculation when you prepare and submit your Self Assessment tax return using compatible software.
3. compatible software for the quarterly updates. MTD for Income Tax updates and the tax return must be sent through compatible software. You need either a cloud accounting tool that handles the submission natively, or a spreadsheet paired with compatible bridging software that supports the workbook and a permitted digital link.

Three changes. The rest is operational discipline.

Worth saying plainly: MTD does not change the underlying tax rules. A quarterly update can produce an estimate, but it is not a final tax calculation: adjustments and the final liability are dealt with through the tax return.

Review your existing workflow against HMRC's digital-record and compatible-software requirements. Keep useful invoicing, expense and mileage habits, then close any gap in structured digital records and permitted digital links.

The childminders who'll find this hardest are the ones currently running on a paper diary and a January reconciliation. That annual-only approach is not enough once MTD applies because the required digital records must exist by each update deadline. Your accountant cannot submit a quarterly update if you've handed them nothing for the quarter.

Practical move for the next 30 days: get every business transaction running through a separate business bank account. Set a 15-minute weekly admin slot (Sunday evening works for most childminders, after the last child has gone home and the dishes are done) to log fees, food costs, household-share expenses, and mileage against the right categories. That single habit takes you most of the way.

A quarterly update is not a tax return. It contains cumulative category totals from the start of the tax year to the update-period end. For a childminder, useful internal tracking categories include the following; your filing software should map them to the HMRC fields required for your income source and turnover:

Cumulative income to this update-period end: weekly fees per child, settling-in fees, late-collection charges, holiday-club fees if you offer them, sibling rates, retainer or holding fees, and any add-ons like school pick-up surcharges.

Total expenses by category: food and drink for minded children, household running costs (the HMRC simplified flat-rate childminder expenses are an option here, or actual-cost apportionment), utilities apportionment, vehicle running costs and mileage, toys, books, equipment, training and CPD (paediatric first aid renewals, EYFS courses, safeguarding refreshers), professional memberships (PACEY, NCMA), insurance (public liability, employer's liability if you have an assistant), DBS renewal fees, registration fees, accountant or bookkeeper, phone, and use-of-home if you do paperwork after the children leave.

You don't reconcile each line at the quarterly stage. Your software sends cumulative category totals from the start of the tax year to the update-period end. You make the relevant adjustments and complete the tax calculation when you prepare and submit your Self Assessment tax return using compatible software.

When your records are current, compatible software can calculate the update for you to check. Each update is cumulative from the start of the tax year to the end of the update period. If record keeping and filing use different software, transfer the records through a permitted digital link such as linked cells, CSV import/export or an API; manual re-keying or clipboard transfer is not a digital link.

HMRC publishes simplified expenses rates for childminders that let you claim a flat rate per hour of childcare provided, instead of working out actual food, utility, and household-share costs. The flat-rate route is genuinely simpler and saves time at year-end.

Under MTD, you can still use the simplified rate. You just record the hours-of-childcare-provided figure quarterly (which you'll already have from your attendance records) and apply the flat rate when preparing the Self Assessment tax return in compatible software. Your quarterly update still reports actual cash income and any non-flat-rate expenses (like training, insurance, registration fees, professional membership). The flat-rate covers food and household running costs only.

If you are considering switching between actual-cost expense tracking and the flat rate, do that switch deliberately and keep both years' workings — the rules around which method gives the better outcome change with your turnover and your home setup.

There are three legitimate routes. Each has a real fit and a real cost. Pick once, commit, and stop second-guessing.

Cloud accounting software. Prices and features change. Check HMRC's compatible-software list and confirm the provider's current support for MTD Income Tax, bank feeds, invoicing and any payroll or CIS features you need. Best fit: childminders running with an assistant, or those at the higher end of the income band who want full visibility.

Spreadsheet plus bridging software. The spreadsheet is your record of income and expenses; compatible bridging software that supports the workbook and a permitted digital link reads the spreadsheet and submits to HMRC in the format MTD requires. Best fit: solo childminders with simple finances who'd rather make a one-time purchase than commit to a monthly subscription.

Hand it to your accountant. They handle the quarterly updates on your behalf. Costs more than DIY, but if your accountant already does your year-end, the marginal cost is manageable. The catch: they can only file what you give them. Quarterly cadence still requires you to maintain the records weekly.

There's no "best" answer. The right choice depends on your transaction volume, your tech comfort, and what you already pay for.

If you are required to use MTD and your records are not yet digital, act now: bring them up to date from the date HMRC says your digital records must start, choose compatible software and check your current update deadlines.

1. Open a separate business bank account if you don't already have one. Move all parent payments, food shopping, and supplier spend through it. Every other MTD step gets easier when business spend stops mixing with personal.
2. Pick one tool (spreadsheet plus bridging, cloud accounting, or your accountant) and commit. Set it up properly with the right categories for childminding work, including the flat-rate option if that's your route.
3. Start a 15-minute weekly admin slot. Sunday evening, last child gone, kettle on. Log the week's fees, food costs, household-share apportionments, and mileage.
4. If you're VAT-registered (rare for childminders running below £90,000 turnover), layer ITSA MTD onto your existing quarterly rhythm. Same month-end discipline, second submission.
5. If you're not VAT-registered (most childminders aren't), build the rhythm now. Check HMRC's current update periods and deadlines for the tax year in which you must join.

If you do nothing else this month: the bank account split. Everything cascades from that one decision.

For the parent-facing communication side (a different problem from MTD but the same operational discipline), see writing parent-facing copy as a childminder. Same weekly habit applied to a different surface.

Check current GOV.UK guidance and HMRC compatible-software information for your own MTD obligations.

The time required varies with transaction volume, record quality and the software you use; the continuing duty is to keep accurate digital records and check the software-generated update. If you want full cloud accounting instead, that's a different decision and we'd say so plainly. Either way, the worst route is no route.

The kit pairs with the childminder business documents bundle (£19.99) if you also want parent contracts, settling-in agreements, accident records, medication consent, and GDPR templates with the right MTD-friendly categories built in.

This article is general guidance, not tax advice or guaranteed Ofsted readiness. For your specific tax position, consult a qualified accountant. For your registration and safeguarding obligations, consult your local Ofsted inspector or early-years team.