Help with childcare if you are working
Working Tax Credit
Working Tax Credit is state help for people who are in work (for an employer or self-employed) but on a fairly low income. It includes an element to cover eligible childcare costs – see table below.
Eligible childcare costs include a childminder, playgroup, day nursery and nursery school as long as they are registered. Someone who looks after a child in your own home (such as a nanny) can also be eligible provided they are approved under the Childcare Approval Scheme. For more about tax credits, see Tax credits.
Example
Mary and Ashok have three children. Both work full time and their joint income is £22,200 a year. They claim tax credits and in total receive £18,371 topping up their income to £40,571 a year.
The amount includes a substantial element to help towards childcare costs. The oldest child is at school but the two youngest go to a day nursery, which on average costs the family £320 a week.
Tax credits can cover 80% of the nursery fees up to a maximum of £300 a week, which comes to £240 a week (£12,480 a year)*. But based on the family’s income, their credits including the childcare element are reduced below the maximum amount.
New Deal for Lone Parents
If you are a single parent returning to work after being on state help, you might qualify for help with childcare costs through the New Deal for Lone Parents. Contact your local Jobcentre Plus (Jobs and Benefits Office in Northern Ireland).
Working Tax Credit childcare element
Number of children being cared for |
Amount of childcare costs covered |
Maximum childcare |
| One |
80% of eligible costs up to £175* a week |
£140* a week |
| Two or more |
80% of eligible costs up to £300* a week |
£240* a week |
*Rates shown are for the tax year 6 April 2010 to 5 April 2011.