Question to the Department for Education:

To ask the Secretary of State for Education, what assessment she has made of the potential impact of the introduction of Making Tax Digital for Income Tax on (a) childminders and other home-based childcare providers on the levels of (i) recruitment and (ii) retention in that workforce and (b) on the Government's commitment to fund childcare for 30 hours a week.

We are working with the sector to expand the number of childminders and make it easier for them to operate, including through increased funding rates and new flexibilities to work with more people and spend more time working from non-domestic premises if they want to.

We are taking a range of measures to support the financial sustainability of childminding businesses and other early years providers. From April 2026, local authorities will be required to pass at least 97% of their funding directly to providers.

We are working with local authorities and others to ensure that childminders and other early years providers can be paid monthly for the funded hours they provide, making their income more stable.

In addition, the expansion of the early years entitlements could benefit childminders in different ways: the national average three- and four-year-old hourly funding rate of local authorities is increasing by 4.1%, the two-year-old hourly funding rate is increasing by 3.3%, and the nine months to two-year-old hourly funding rate is increasing by 3.4%. Childminders may also benefit from an expected increase in demand for places.

Making Tax Digital standardises the way that sole traders record and claim business expenses. It could benefit childminders as it means that any business expenses related to childminding will be included in their tax calculations. We are however aware of the strength of feeling amongst childminders and those who work with them. We have been talking regularly to Coram Pacey, HMRC and others to understand the issue, the effect that it is having on the childminding sector and to make sure that the concerns of childminders are clearly understood. The department emphasises its strong support for childminders, who continue to provide high quality and flexible early education, and do so in a way that families across the country greatly value.