Childcare can be one of the biggest monthly outgoings for a family so it's important to claim every financial entitlement available to you. Each year thousands of families miss out on £1000's toward the cost of childcare - make sure you're not one of them.
You may be able to claim:
- Child Tax Credit - you don’t need to be working
- Working Tax Credit - you may be able to claim extra to help cover the costs of approved childcare
You can apply for Working Tax Credit even if you’re on leave or about to start a new job.
Check what help you could get with childcare costs.
Child Tax Credit
You may be able to claim Child Tax Credit if you’re responsible for children, either:
- aged 16 or under - you can claim up until 31 August after their 16th birthday
- under 20 and in eligible education or training
You don’t need to be working to claim Child Tax Credit. Click here for more information.
Child Tax Credit won’t affect your Child Benefit.
Working Tax Credit
You could get Working Tax Credit if either of the following apply:
- you’re aged from 16 to 24 and have a child or a qualifying disability
- you’re 25 or over, with or without children
You must:
- work a certain number of hours a week
- get paid for the work you do (or expect to)
- have an income below a certain level
Click here for information on Working Tax Credit.
You can’t claim tax credits and Universal Credit at the same time.
Working Tax Credit (Childcare Element)
This is extra money for working families to help pay for registered childcare.
You can get help paying for childcare if it’s provided by a:
- registered childminder, playscheme, nursery or club
- childminder with an Ofsted-registered childminding agency
- registered school
- home careworker working for a registered home care agency
This is known as ‘approved childcare’.
You can claim tax credits to help with your childcare costs if you’re eligible. Use this tool to work out what childcare costs you should claim. You can make your claim seven days before you start paying for childcare.
If you already claim tax credits for childcare costs and your costs have changed, you can also use this tool to work out if you need to report the change to the Tax Credit Office. Changes can be reported online or by telephone on 0345 300 3900.
You can’t claim tax credits and Universal Credit at the same time.
Childcare Vouchers and Tax Free Childcare
Some employers have signed up to Childcare Voucher schemes which enable you to save up to £943 per year per parent off the cost of your childcare. Check with your employer's HR department to see if it has joined a scheme.
The government have also launched a Tax Free Childcare scheme which enables working and self-employed parents to benefit from a 20% saving on childcare costs.
It is important that you work out which of the above schemes would suit you, as you cannot benefit from Tax Free Childcare as well as receiving Universal Credit or Working Tax Credit.
Follow the link for an overview on how the vouchers work and save you money at Money Saving Expert tax-free childcare information hub.
For more information or to apply for tax-free childcare click here.
Help while you study
There is a range of support available for parents in education, depending on your age and whether you are in 6th form, higher education or further education. Click here to find out what support is available.
Additional childcare fees
Some childcare providers will have additional fees. It's important that you ask about these before you sign your contract so that you can budget and also to ensure you don't get a surprise when your invoice arrives.
Ask your childcare provider if meals are payable on top of the hourly or sessional cost. The majority of outings will be low cost or free. Trips to the local park, the beach and the library are popular with childcare providers, and the Early Years Framework includes an element of learning outside. Your childcare provider may wish to take the child further afield, perhaps to the zoo or a farm - trips like this may incur an additional charge, but you should be given plenty of notice, or they may give you the option to opt out.
Payment options
Most childcare providers request monthly payment in advance. This means you pay for the childcare you're going to use the following month - so in January you pay for February's sessions. Payment methods vary but most childcare providers accept bank transfer, cash or cheque and childcare vouchers.
If you have a particular time of the month you'd like to pay or a certain payment method you'd like to use, just ask your childcare provider.