Eligibility

To be eligible for the childcare element of Tax Credits you need to work at least 16 hours per week if you are a single person. If you are part of a couple, you must both work at least 16 hours per week unless one of you is either; in prison, in hospital, claiming Carer’s Allowance, or incapacitated.

Incapacitated means you or your partner receives one of the following:

• housing benefit (HB) with a disability premium, or a higher pensioner premium;
• housing benefit with a childcare earnings disregard because the other member is ‘incapacitated’ under the HB regulations
• disability living allowance (DLA);
• personal independence payment (PIP)
• armed forces independence payment (AFIP)
• attendance allowance (AA);
• severe disablement allowance;
• increase of disablement pension under Section 104 Contributions and Benefits Act 1992;
• incapacity benefit at the short-term higher rate or the long-term rate;
• industrial injuries benefit with constant attendance allowance;
• war disablement pension with constant attendance allowance or mobility supplement;
• a vehicle under the Invalid Vehicle Scheme.
• contributory employment and support allowance (CBESA) or a limited capability for work credit (from 1 May 2012) where entitlement to that allowance, that credit, statutory sick pay (SSP) or short term higher rate incapacity benefit, long term incapacity benefit or severe disablement allowance has existed for a period of 28 weeks comprising one continuous period or two linked periods (provided that, if the person received statutory sick pay, they also met the relevant contribution conditions);

How does it work?

Tax Credits are paid on an annual basis from 6 April to 5 April, in line with the tax year. This means that you need to renew your claim every year and make sure that the details you provide are up to date. If your circumstances change, you need to report this within 1 month of the change happening otherwise you could end up with either an under or overpayment. 

You need to tell HMRC what your average childcare costs are. 

You can check the guidance leaflet here for more information about how to work this out. 

There is also more guidance here about how to work out your costs depending on if they are fixed, variable or short-term. 

How do I claim?

You need to already have an existing tax credit claim. If you are receiving Child Tax Credit only, you can add Working Tax Credit if you meet the eligibility criteria and claim the childcare costs element within your Working Tax Credit Award.

No new claims for Tax Credits can be made. If you are not claiming Tax Credits you should check our Universal Credit page.

You can phone HMRC on 0345 300 3900 and ask for the element to be added to your Working Tax Credit award. They are open Monday to Friday: 8am to 6pm. The phone line is closed on weekends and bank holidays.

HMRC say that phone lines are usually less busy Tuesday to Thursday from 2pm to 4pm.

You can also manage your Tax Credit account online here.   

Change of circumstance

Tax Credits are paid on an annual basis from 6 April to 5 April, in line with the tax year. This means that you need to renew your claim every year and make sure that the details you provide are up to date. If your circumstances change, you need to report this within 1 month of the change happening otherwise you could end up with either an under or overpayment.

You can do this by phoning HMRC on 0345 300 3900. They are open Monday to Friday: 8am to 6pm. The phone line is closed on weekends and bank holidays.

You can also manage your Tax Credit account online here.  

Changes you must report

You must tell HMRC within 1 month if:

• you’re no longer paying for childcare
• the amount you pay for childcare goes down by £10 or more a week
• your childcare provider isn’t approved any more 

You must also tell HMRC if:

• you start paying for approved childcare
• you change childcare provider

There’s no deadline to report these changes, but you still have to let HMRC know. It’s important to tell them as soon as possible to make sure you’re getting the right money.

Sickness

If you are employed and off sick from work, receiving Statutory or enhanced Sick Pay, Employment and Support Allowance or receive National Insurance Credits because of incapacity/limited capability for work you remain entitled to the childcare costs element for 28 weeks

Maternity/Paternity/Adoption Leave

You are still considered as working whilst on Maternity, Paternity or Adoption Leave and so you remain entitled to the childcare cost element in your Tax Credit award for 52 weeks. However, before your leave started you need to have worked an average of 16 hours per week, if you are a lone parent, a combined 24 hours per week, with one person working at least 16 hours per week, if you are part of a couple with children.
The same rules apply if you are self-employed and you would have been entitled to maternity, paternity, parental or adoption leave if you had been employed.