Help with paying for childcare
The cost of childcare varies widely so it's important to check out what's available near you.
Families can get help with the cost of childcare. As well as Tax Credits, there are many other different schemes for which you may be eligible depending on your circumstances.
|The Paying for childcare website has a wealth of helpful information for working parents, studying parents and parents living with children with disabilities to help you find your way through this maze. It includes a Tax Credit checker where parents can look whether thay are eligible for Tax Credits.|
Three and four year olds can get the Early Years Entitlement which gives them up to 15 hours of free learning per week for 38 weeks of the year in nurseries, pre-schools and with some childminders. Some two year olds can get the same using Devon's 2gether scheme.
Families who are in work and who pay for Ofsted-registered childcare can get financial help with those costs through tax credits. Depending on your household income, tax credits can give you back up to 70% of your childcare costs, up to a maximum £175 a week for one child and £300 a week for two or more children.
For more information about the childcare element of Working Tax Credit look at the website or contact the Tax Credits Helpline on 0845 300 3900.
Some employers offer childcare vouchers, where you offer up part of your salary in return for help with the cost of childcare (salary sacrifice). These vouchers are exempt from tax and National Insurance Contributions. The amount currently exempt from these contributions is £55 per week or £243 per month for basic rate tax payers.
Some families will be able to get tax credits as well as vouchers.
Working Tax Credit or childcare vouchers?
Generally, if you are a high earner you will be better off accepting childcare vouchers, as you will make the greatest savings on tax and National Insurance Contributions, especially if you are paying higher childcare costs. However, you should seek independent advice before making a decision to ensure that you are not losing out.
National Insurance Credits
If you are a parent or carer claiming Child Benefit for your child aged under12 while caring for them you should automatically receive National Insurance Credits.
New Specified Adult Childcare credits were introduced by the government from the 2011/2012 tax year. You may be able to get these credits if you care for a family member under 12, for example your grandchildren, and you're an adult under State Pension age. These credits count towards basic State Pension and certain bereavement benefits.
You will have to claim the credits; they will not be added automatically to your NI contribution record. You can start to claim the credits for the tax year 2011/2012 in October 2012. Although they will not appear on your NI record or State Pension statement until after April 2013.
Download the Specified Adult Childcare credits factsheet to find out if you're eligible for the credits.