Tax Credits and Paying for Childcare
Guide to Tax Credit
The Child Tax Credit and the Working Tax Credit replaced the Working Families Tax Credit, Disabled Persons Tax Credit and the Children’s Tax Credit in April 2003. Tax Credits are administered by HM Revenue & Customs. The Working Tax Credit is paid through your pay packet. The Child Tax Credit and the Childcare Element of the Working Tax Credit is paid to the child’s main carer. Tax Credits are designed to support families, make work pay and tackle poverty. Tax Credits help to tackle many of the problems that parents face when trying to look for or stay in work. Some families may also be able to get help with the costs of registered childcare through the Childcare Element of the Working Tax Credit.
The Child Tax Credit
Child Tax Credits are paid to the main carer. All families may be eligible, whether or not the parent(s) work.
The Childcare Element
The Childcare Tax Credit is a component of the Working Tax Credit. The Childcare Element is paid to the main carer. The Childcare Element covers a percentage of eligible childcare costs. Eligible childcare means childcare that is registered with Ofsted (the Office for Standards in Education) under the 1989 Children Act, and includes registered childminders, crèches, playgroups, day nurseries and out of school care schemes.
Further Information
Tax Credit application forms are available from :
- The Tax Credit helpline 0845 300 3900 or text phone 0845 607 6078
- IRECs (HM Revenue & Customs Enquiry Centres)
- Job Centres
- Post Offices
- Benefits Agency Offices
- Citizens Advice Bureaux
- You can also make your claim online at the HM Revenue & Customs website, in the "Related Links" section below.
The Working Tax Credit
The Working Tax Credit provides a top up to the wages of low income workers. It is paid through the wage packet.
How are Tax Credits Calculated?
The amount of Tax Credit awarded to a family is calculated by adding together the tax credits they are eligible for. The amount of tax credit awarded is dependent on gross earnings and other income after any contributions to a personal or occupational pension have been taken off.
A Tax Credit calculator is available online at the HM Revenue & Customs website, in the "Related Links" section below, where you can also find more detailed information on tax credits.
