Tax Credits

Help with childcare costs - do you qualify for extra tax credits?

If you work, you could get extra tax credits to help with your childcare costs. You can claim as soon as you start paying for childcare, and only for the amounts that are actually paid by you.

Who Can Qualify?

  • You're a lone parent

You must work 16 hours or more a week to claim help with childcare costs.

  • You're part of a couple

a) Generally you and your partner must both work 16 hours or more a week to claim help. Only one of you has to work 16 hours or more if the other is:

  • ill or disabled and claiming disability benefits

  • in hospital

  • in prison - serving a custodial sentence or remanded in custody awaiting trial or sentence

  • entitled to Carer's Allowance - even if they don't get any payments because they receive other benefits instead

How much help you can get?

You can get help with up to 70 per cent of your childcare costs - up to certain limits.

If you pay childcare for:

  • one child, the maximum childcare cost you can claim is £175 a week

  • two or more children, the maximum cost you can claim is £300 a week

This means that the maximum help you can get for your childcare is:

  • £122.50 a week for one child

  • £210 a week for two or more children

But you won't necessarily get the full £122.50 or £210 a week - the actual amount you get will depend on your income. The lower your income, the more tax credits you can get.

What income limits apply?

There is no set income limit for help with childcare costs.

A couple with one child, paying £175 a week for childcare, will still get some tax credits with an annual income as high as £41,000. But this is only a very general guide.

It's important to know that:

  • different income limits apply depending on your circumstances - for example if you have a large family the income limit could be higher

  • you need to make a claim to get a definite answer to how much you are entitled to
     

You can use 'at a glance' entitlement tables to get a rough idea of the help you could get. These tables show yearly amounts of tax credits based on different amounts of income - but they don’t cover every situation.

If you want a better idea of how much you could get, there's also an online tax credits calculator you can use.

Childcare costs you can’t claim for through tax credits?

You can't claim for:

  • payment from your employer towards your childcare costs, either in cash or vouchers - this includes vouchers in return for a reduction in your pay (known as a 'salary sacrifice')

  • free early learning or nursery education - for example the 15 hours a week free early years education for three and four year olds in England

  • payments from the government towards your childcare costs because you are a student, or you are starting work

You can still claim for any childcare costs that you actually pay for yourself. For example, if your employer pays part of your childcare costs in vouchers, you can make a claim for the rest.