Child Tax Credit and the childcare element of the Working Tax Credit

Nine out of ten families with children are eligible for the new tax credits. Whether you are working or not, families with incomes of up to £58,000 a year (or £66,000 a year if there is at least one child who is less than a year old) could be eligible for Child Tax Credit. Child Tax Credit is paid into the bank account of the main carer - the person who is mainly responsible for looking after the children. This money acknowledges and supports the costs of bringing up children.

Childcare element of Working Tax Credit

Working Tax Credit is an in work tax credit for families with low incomes and includes an element to support the costs of registered or approved childcare.

Which childcare qualifies?

You must use registered or approved childcare which may be provided by:

A childminder, nursery, play scheme or a club that is registered to provide childcare.
Someone approved under the home Childcare Approval Schemes in England, Wales and Northern Ireland who provides childcare in your child’s home or in domestic premises.
A school, out of school hours and on school premises – but special arrangements apply in England and these are explained below.
A care worker or nurse from an agency registered for providing care in the home, for example, a domiciliary care worker.
An approved foster carer, but the care must be for a child who is not the carer’s foster child.

You must check your childcare provider is registered or approved.

What is registered childcare?

Your childcare provider will need to be registered by one of the following:

Ofsted in England – but there are different registration arrangements and these are explained below.
The Care and Social Services Inspectorate for Wales.
The Scottish Commission for the Regulation of Care.
A Health and Social Services Board or Trust in Northern Ireland.

Ofsted registered childcare providers will need to be registered as follows:

If your child is under 5, they must be registered on the Early Years Register.
If your child is aged 5 to 7, the provider must register on the compulsory part of the General Childcare Register.
If your child is aged 8 or over, the childcare provider must be registered on the voluntary part of the General Childcare Register.

There will be some providers in England who do not need to register on the Early Years Register or the compulsory part of the General Childcare Register. For example, activity-based childcare such as sports clubs or nannies because they provide care in the child’s own home. They must register on the voluntary part of the General Childcare Register if they want to be eligible childcare providers for tax credits.

You should check that your provider is registered on the correct childcare register.

To apply for the childcare element of the Working Tax Credit:

Lone parents must work at least 16 hours a week.
Both members of a couple must work 16 hours a week or more.
If one member of the a couple is incapacitated the other member must work 16 hours or more.

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

For one child, the maximum you can claim is £175 per week.
For two or more children, the maximum is £300 per week.

The childcare element of the working tax credit will be paid into the bank account of the main carer alongside the child tax credit.

Contacts and resources

The tax credit helpline helps parents to complete their claim form or check the progress of their claim. You can call the helpline on 0845 300 3900 (local call rate) 8.00am-8.00pm seven days a week (except Christmas Day, Boxing Day & Easter Sunday). For people with hearing or speech difficulties please call 0845 300 3909.

Parents can also apply online and follow a simple guide to see if you are eligible at the Inland Revenue Tax Credits website.

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