You may be able to get help from the government to pay for childcare like childminders and nurseries. You must use ‘approved childcare’ to qualify for help.
Tax credits are payments from the government. If you're responsible for at least one child or young person who normally lives with you, then you may qualify for Child Tax Credit. If you work and pay for childcare you may be able to receive tax credits to help with the costs through the Childcare Element of the Working Tax Credit.
This can pay for up to 70% of your childcare costs up to a maximum of:
- £175 per week for 1 child
- £300 per week for 2 or more children
Please visit the HMRC Tax Credits Opens in a new window website for further information.
Alternatively, you can phone the Tax Credit helpline on 0845 300 3900.
If you work and pay for childcare, your employer might be able to help with some of your childcare costs. Childcare vouchers are one way they can do this.
These are an employee benefit available to all eligible working parents whose employers run the scheme. They are available to both basic and higher rate tax payers.The vouchers can be used to pay for all types of registered or approved childcare. Essentially, you ‘sacrifice’ a portion of your salary and receive this as childcare vouchers rather than money.
These vouchers are exempt from Income Tax and National Insurance contributions (for employer and employee) which means an individual can save up to £1,196 per year on the costs of childcare. Please contact the HR department of your employer to see if they run a scheme or visit the Paying for Childcare Opens in a new window website.
Which to choose?
Childcare vouchers may affect the amount of tax credits you can get. HMRC have an online calculator that can help you decide whether you would be better off overall taking the Childcare Vouchers or claiming through Tax Credits.
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