If you provide childcare as a childminder, you pay income tax on the income you receive from this work. However, the costs incurred in earning that income are tax-deductible.
Eligible workspace
This does not apply to costs relating to the premises where the children are looked after, or to the fitting out of those premises. This is because these premises are generally located in the childminder’s home. Costs relating to the (fitting out of) the premises are only deductible if it is a so-called ‘qualifying workspace’. This was recently confirmed by the District Court of North Holland in a ruling.
A space is considered a qualifying workspace if, according to generally accepted practice, it is a separate area within the childminder’s home. The bedrooms, which were fitted out for childminding purposes, do not qualify as such separate spaces.
Not deductible
The costs relating to wear and tear on furniture, heating, electricity, water and cleaning are therefore not deductible. The court has ruled that all costs broadly related to the workspace are not deductible.
The cost of buying nappies and baby wipes is also not tax-deductible, as these costs are generally borne by the parents themselves.
The claim for deduction of first-aid costs has been rejected because the childminder has not demonstrated that these costs were actually incurred. Similarly, the childminder has not provided sufficient evidence to support the claimed deduction for entertainment expenses, to show that these costs were actually incurred.
The deduction for telephone costs relates to the fixed-line subscription at the childminder’s home, for which the law imposes a specific deduction limit (business call charges are, however, deductible).
Deductible
The childminder is entitled to deduct the costs of toys and craft materials. According to the court, the fact that the childminder is also the children’s grandmother does not affect this.