Help With The Cost Of Childcare

The Childcare Element Of Working Tax Credit

You may be able to get extra help with the costs of 'registered' or 'approved' childcare. This is the childcare element of Working Tax Credit.

Can I claim the childcare element?

If you are a lone parent, you must be aged 16 or over and you must work at least 16 hours a week.

 

If you are in a couple, you must both be aged 16 or over and either

• both of you must work at least 16 hours a week, or
• one partner must work at least 16 hours a week and the other partner must be
  • incapacitated, or
  • an in-patient in hospital, or
  • o in prison (whether serving a custodial sentence or remanded in custody awaiting trial or sentence).

You are treated as incapacitated if you receive one of the following

• Disability Living Allowance
• Attendance Allowance
• Severe Disablement Allowance
• Incapacity Benefit at the short-term higher rate or long-term rate
• Industrial Injuries Disablement Benefit (with Constant Attendance Allowance for you)
• War Disablement Pension (with Constant Attendance Allowance for you)
• Council Tax Benefit or Housing Benefit with a Disability Premium or Higher Pensioner Premium for you, or
• a vehicle under the Invalid Vehicle Scheme.

If you are receiving Maternity Allowance, Statutory Maternity Pay, Statutory Adoption Pay or Statutory Paternity Pay, we treat you as being in work from the date you start receiving these payments, as long as you were in qualifying paid work (of at least 16 or 30 hours, whichever applies) before going on the leave.

 

If you are becoming a parent for the first time, you can claim Working Tax Credit, including the childcare element, from the child's date of birth or placement for adoption, as long as you usually worked at least 16 hours a week before the maternity, adoption or paternity leave began.

 

If you are already a parent before going on the maternity, adoption or paternity leave, Working Tax Credit is available if you worked at least 16 hours a week before the leave began. You can claim the childcare element to help with the costs of eligible childcare for the new baby or child as well as for other children in your family. This will help you to settle a new baby or child into childcare before returning to work.

 

Claim Child Tax Credit and Child Benefit for the new child as soon as possible.

What childcare costs can I claim?

You can claim the childcare element for the costs of any 'registered' or 'approved' childcare that you pay for. You can only claim for the amounts you actually pay out.

 

If you receive a payment or refund from your Local Education Authority for part-time nursery education (sometimes given for three to four year olds), you cannot claim for the costs covered by that payment or refund.

 

You cannot claim the childcare element for the cost of compulsory education.

 

If you receive childcare vouchers from your employer to cover some of the costs of your childcare, you cannot claim for the amount covered by the voucher (even if you receive the vouchers in return for a reduction in the amount of cash pay you receive (sometimes called salary sacrifice)).

 

As a result childcare vouchers may affect your entitlement to both the childcare element of Working Tax Credit and Child Tax Credit. To help you decide whether you would be better off with tax credits or childcare vouchers, we have put together a calculator.

 

You can claim the childcare element for any child up to

• the Saturday following 1 September after their 15th birthday, or
• the Saturday following 1 September after their 16th birthday if the child is on the blind register, or came off it in the last 28 weeks, or you receive Disability Living Allowance for the child.

How much help with childcare costs will I get?

The childcare element can help with 80% of your eligible childcare costs up to a maximum of

• £175 a week, if you pay childcare for one child
• £300 a week, if you pay childcare for two or more children.

The table below shows the maximum amount you can get, but the actual amount will depend on

your income.

 

Number of children	Weekly limit on costs	Percentage of costs covered by childcare element	Maximum childcare element available
One child	£175	@ 80%	£175 x 80% = £140
Two or more children	£300	@ 80%	£300 x 80% = £240

 

If you employ someone as an 'approved' home childcare provider, you can claim for up to 80% of the gross costs of employing that person as long as this is within the limits above. Include

• the costs of any employer's National Insurance contributions you pay
• the costs of any benefits in kind you give, and
• any other costs associated with employing that person.

What do you mean by 'registered' or 'approved' childcare?

The childcare must be provided by one of the following

• a childcare provider 'approved' under a Ministry of Defence accreditation scheme abroad
• an 'approved' foster carer. (The care must be for a child who is not a foster carer's foster child.)

In Wales only

• a childcare provider 'registered' by the National Assembly for Wales through the Care Standards Inspectorate for Wales
• out-of-school-hours childcare, provided by a school on the school premises, or by a Local Education Authority
• a person 'approved' under the Approval of Child Care Providers (Wales) 2007 Scheme providing childcare in the child's home or if several children are being looked after, in one of the children's homes
• a domiciliary worker or nurse from an agency 'registered' under the Domiciliary Care Agencies (Wales) Regulations 2004 providing childcare in the child's home.

Your responsibility

You cannot claim the costs of childcare if it is not 'registered' or 'approved'.

 

All 'registered' or 'approved' childcare providers are given a letter or certificate as evidence of their approval or registration.

 

Some childcare providers must regularly re-apply for approval or registration (for example yearly). If this applies to your childcare provider, the letter or certificate issued to them will clearly say when their approval or registration runs out.

 

Other childcare providers are regularly checked to make sure they are still suitable childcare providers. Many organisations publish the results of the checks they do (for example in an inspection report).

 

It is your responsibility to make sure that the childcare you are using is 'registered' or 'approved', you should

• check the documents sent to your childcare provider to confirm that they are 'registered' or 'approved'
• keep a record or a copy of their registration or approval details including
  • the authority they were 'registered' with
  • their registration or approval number if one was sent to them
  • the date their registration or approval is due to expire
• check regularly that their registration or approval is still valid. Ask to see their new evidence of approval or registration, or their inspection report

Tell us within one month if your childcare provider loses their approval or registration or their approval or registration runs out and it has not been renewed, even if they have applied to renew it.

 

If you don't tell us, and we have overpaid you tax credits, you will have to pay back the extra money. You may also have to pay a penalty of up to £300 if you failed to report the change within one month.

 

If your childcare provider is no longer 'registered' or 'approved' and you want to carry on getting the childcare element, it is also your responsibility to make alternative arrangements.

 

If you change your provider, you must tell us even if you are still paying the same amount to the new provider, and give us

• their name
• their address
• their phone number
• their registration or approval number
• the amount you are paying them for childcare.

Childcare provided by a relative

You will not be eligible for help from the Working Tax Credit childcare element if the childcare is provided by

• a relative of a child caring for that child in the child's home, even if the relative is 'registered' or 'approved', or
• a relative approved' under the Approval of Childcare Provider in Wales

caring for a child, away from the child's home and the care is solely for a child to whom the provider is related.

 

Relative means a

• parent
• grandparent
• aunt or uncle
• brother or sister

whether by blood, half-blood, marriage, civil partnership or affinity. Affinity means a person with a strong-relationship to the child, for example someone in a parental position regarding their partner's children, and includes step parents.

 

If you've any questions about the meaning of 'relative', please phone the Tax Credits Helpline on 0845 300 3900

 

This section has been extracted from the HM Revenue & Customs leaflet WTC5 - Help with the cost of childcare|