Running a nursery or childcare setting means wearing many hats, including a caregiver, administrator, problem-solver, and sometimes, accountant. And as tax season approaches, that last role often becomes more pressing.
Whether you’re a self-employed childminder or running a larger early years setting, filing your Self Assessment tax return is a non-negotiable part of the job. But don’t worry—this blog walks you through exactly what you need to do to get it right, without any last-minute panic.
Are you required to file?
If any of the following apply to you for the 2024–25 tax year, you’ll need to submit a Self Assessment.
- You’re self-employed (as a sole trader).
- You run your childcare setting as a limited company and take income via dividends.
- You earn over £1,000 in untaxed income.
- You or your partner claims Child Benefit and your income is over £60,000 (you’ll need to pay the High Income Child Benefit Charge).
- You receive rental income or income from other sources (like freelance work).
Failing to submit a return when required can lead to penalties, so it’s worth checking your situation early and getting everything in order.
Key deadlines
Keeping track of important deadlines can really help—here are the key dates for your 2024–25 tax return:
| Task | Deadline |
| Register for Self Assessment (if new) to file your 2025/25 tax return | 5 October 2025 |
| File paper tax return | 31 October 2025 |
| File online tax return | 31 January 2026 |
| Pay your tax bill | 31 January 2026 |
| Make first “Payment on Account” (if required) | 31 January 2026 |
| Second Payment on Account | 31 July 2026 |
Mark these deadlines to stay on track and avoid penalties.
Now that you know when everything is due, the next step is making sure you have everything in place to file on time. This simple checklist will help you stay organised and avoid last-minute stress.
Self Assessment checklist you shouldn’t ignore
Use this checklist to make sure you’ve done everything for your Self Assessment.
It’s quick, clear, and helps you avoid mistakes.
1. Keep accurate financial records
From day one, track all income and expenses related to your childcare business. HMRC requires records to be kept for at least five years after the 31 January submission deadline.
You should record:
- Fees from parents
- Government funding (e.g., early years entitlement payments)
- Staff wages and pensions
- Rent or mortgage interest for business premises
- Utilities, insurance, and maintenance
- Equipment, toys, and learning materials
- Training and professional memberships
- Travel expenses for business purposes
Tip: Use accounting software approved for Making Tax Digital (MTD) to make record-keeping and submissions easier.
2. Track your expenses
The good news is that many of the expenses you incur to run your setting can be claimed as tax-deductible business expenses. Examples include:
- Rent, heating, and lighting for your premises
- Business rates
- Salaries, NICs, and pension contributions for staff
- Food and drink for children
- Cleaning, laundry, and hygiene products
- Learning resources and outdoor play equipment
- Professional development and staff training
Keep receipts and invoices wherever possible, or use software that stores them digitally.
3. Know what not to include
Some costs feel connected to your work but don’t qualify as allowable expenses. These include:
- Personal food and drink
- Clothing that isn’t branded or a uniform
- Holidays or leisure trips (even if children are involved!)
- Fines or penalties
- Anything used partly for personal reasons without a clear business split
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4. Report any other income
If you also earn income outside of your childcare work, such as from:
- Property rentals
- Dividends
- Investments
- Freelance or consulting work
You must declare this as part of your return. HMRC wants the full picture, not just your nursery’s income.
5. File online or with support
Filing online is the most popular option—it’s flexible, fast, and gives you until 31 January. You can:
- File directly on the HMRC portal
- Use any accounting software
- Hire an accountant to take care of it all for you
As we said earlier, make sure you’re using software that is recognised by HMRC and compatible with Making Tax Digital (MTD), which will become mandatory for more businesses soon.
Prepare for Making Tax Digital (MTD) for Income Tax
Starting April 2026, if you’re self-employed or a landlord earning more than £50,000 per annum, you’ll need to follow the new Making Tax Digital (MTD) rules for Income Tax. A year later, in April 2027, the threshold will drop to £30,000. Under MTD, you’ll need to:
- Keep accurate digital records of income and expenses
- Submit quarterly updates to HMRC
- Use MTD-compatible accounting software
Preparing now will make the transition far easier. Start by reviewing your current record-keeping, exploring suitable software, and getting familiar with quarterly submissions to avoid last-minute stress. Early adoption means fewer disruptions when the rules become mandatory.
Common mistakes to avoid
Nursery and childcare providers often run into common Self Assessment pitfalls that can cost time and money. These include:
- Leaving record-keeping until January
- Forgetting to declare local authority funding
- Missing income from certain sources, especially cash payments
- Accidentally claiming personal expenses
- Overlooking payments on account when required
Even minor errors can trigger HMRC enquiries, lead to penalties, or cause unexpected tax bills. To avoid this, keep accurate and up-to-date records throughout the year. Double-check all figures before submitting, or have a specialist accountant review them for you.
Why do you need an accounting expert on your side?
An experienced accountant who understands the early years sector can:
- Maximise your allowable expenses so you’re not leaving money on the table.
- Ensure accuracy to avoid HMRC penalties or costly corrections.
- Save you time by managing the process from start to finish.
- Plan ahead for tax liabilities, cash flow, and future changes like Making Tax Digital.
- Offer peace of mind knowing your return is compliant and submitted on time.
Rather than spending evenings buried in spreadsheets, you can focus on running your nursery while a professional takes care of the numbers. It’s not just about filing a return—it’s about building financial confidence and freeing yourself from the stress of tax season.
Conclusion
When you’re caring for children every day, tax isn’t your top priority—and that’s understandable. But tackling your Self Assessment early doesn’t have to be complicated.
With the right checklist, records, and guidance, you can file confidently, stay compliant with HMRC, and focus on providing a trusted, nurturing environment for the children you serve.
At Bradleys, we help nurseries and childcare providers across the UK file stress-free. We ensure income is reported accurately, expenses are fully claimed, and deadlines are met—avoiding penalties and surprises.
Whether you need full tax return support or a review of your figures, our expert team is here to help. Contact us today.
