Early years and preschool

 
 

Tax credits

What are Tax Credits?CIS campaign Church Street
There are two types of tax credits you can claim: the Working Tax Credit and the Child Tax Credit. Both of these tax credits have been designed to help you pay for the childcare costs associated with bringing up children.

What is the Working Tax Credit?
The Working Tax Credit is the payment that the Government makes via the HMRC, to top up the earnings of working people, who are on low incomes. There are extra credits for working households in which someone has a disability.

The Working Tax Credit is available to employees and self-employed people and provides financial support for parents who have childcare expenses. To qualify, your childcare provider must be registered.

Examples of registered childcare include crèches, childminders, nurseries or out of school providers.

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How Do Working Tax Credits Help with Childcare Costs?
The Working Tax Credit comprises eight elements: a Basic Element, a Couples Element, a Lone Parent Element, a 30 Hour Element, a Disability Element, a Severe Disability Element, a 50 Plus Element, and a Childcare Element.
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The Childcare Element of the Working Tax Credit
The Childcare Element of the Working Tax Credit has two main objectives:
  • To help low-income parents to pay for the costs of registered childcare;
  • To remove the cost of childcare as a barrier to families entering employment.

The amount of financial support you receive depends on your family’s income, and the number of hours of childcare your child/children receive. It is paid directly into the main carer’s bank or post office account.


How Much Financial Help Does the Childcare Element of the Working Tax Credit Provide?
The Childcare Element of the Working Tax Credit can help cover up to 70 per cent of registered childcare costs paid by families.

The maximum amount you could receive is:

  • 70% of £175 (£122.50) a week for families with one child.
  • 70% of £300 (£210) a week for families with two or more children.

The Working Tax Credit can help you with the costs of childcare, giving you time to accomplish other things in life.

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Am I Eligible?
To claim the Childcare Element of the Working Tax Credit, you must be over 16 years of age and responsible for at least one child.

If you are a lone parent, you must also be working at least 16 hours per week.

If you are in a couple, both of you must work at least 16 hours per week. Alternatively, one parent must work at least 16 hours per week and the other partner must be incapacitated, an in-patient in hospital, or in prison.

You must have a bank or post office account, and you a National Insurance Number.

The childcare you are paying for must be provided by:

  • Registered crèches, childminders, nurseries, play schemes or out of school clubs;
  • Schools or other establishments that are exempt from registration;
  • Providers of childcare for children aged 8 or over, who are approved by accredited organisations.

You can claim for childcare which takes place in your own home, as long as it is registered care and the carer is not your partner or a relative of the child.

You can also claim for holiday play schemes, even if they last for less than four weeks.

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How can I apply?
Call the Family Information Service on 020 7641 7929 for confidential and friendly advice on how to apply. We can also tell you whether the childcare your child/children attend has been registered.

You can access a Tax Credit application form on HMRC's internet site (www.hmrc.gov.uk)  or by calling their helpline on 0845 300 3900. You can also drop in to one of their local offices.

If your circumstances change throughout the year, either because your income changes, you have another child or your childcare costs change, all you need to do is telephone the Tax Credit Helpline. If you are not sure what to do, the Family Information Service is also available to help you.


Child Tax Credit
The Child Tax Credit is for families with at least one child. It is made up of two elements: a family element and a child element.

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The Family Element
The family element is payable to any family responsible for a child. It is paid at a higher rate to families with at least one child under the age of one. This is known as the baby element.

The child element The child element is payable for each qualifying child you are responsible for. This is paid at a higher rate if the child has a disability, and is enhanced for children with a severe disability. This is known as the disabled child element. You cannot include a child or young person that is in receipt of Incapacity Benefit in their own right, on a claim for Tax Credits. If you also qualify for the child care element of Working Tax Credit, this will always be paid alongside payments of Child Tax Credit, direct to the main carer. It does not have to be paid to the person who receives Working Tax Credit. It will be paid weekly or monthly, depending on how often you choose to receive payments of Child Tax Credit. In certain circumstances your claim may be payable from an earlier date (up to a maximum of 3 months) where you (or you and your partner if it's a joint claim) satisfied the requirements for entitlement.

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Important Contact Details
Westminster City Council: Family Information Service 020 7641 7929

HM Revenue & Customs: Tax Credit Helpline 0845 300 3900
For people with hearing or speech difficulties 0845 300 3909

Or visit:

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