Government Child Tax Credits & Childcare Vouchers



Childcare Vouchers  | Childcare Voucher Benefits  | Tax and Childcare Vouchers


Child Tax Credits

The UK Government, since April 2003, has promoted child tax credits as an effective way to reduce the tax burden on working parents. Although, HMRC state that as many as "9 out of 10 families with children are entitled to tax credits" - an incredible total when you consider this is money that working parents could be putting toward childcare costs. Here is some information on child tax credits to help you understand how they work.


What are child tax credits?

Child tax credits are a form of Government benefit for families who are responsible for at least one child or qualifying young persons. Child tax credits can be paid to workers who continue to pay UK National Insurance Contributions when posted from the UK to work in another country in the European Economic Area, although these criteria are available in.


Am I eligible for child tax credits?

The general rules over eligibility for child tax credits is that you must be over 16 years old and live in the United Kingdom (England, Scotland, Wales, Northern Ireland or associated islands in the British Isles). Child tax credits are for families who are responsible for at least one child, or for qualifying young persons. Child Tax Credit can be paid to workers who continue to pay UK National Insurance Contributions when posted from the UK to work in another country in the European Economic Area. HMRC state that you do not have to be working to claim child tax credits.


Criteria is likely to change so get updated information by visiting the 'Legislation' page on Government child tax credits, childcare vouchers to learn about eligibility and the affects on parents' tax.


How much will I get?

The maximum amount of Child Tax Credit you can get is based on your circumstances. This maximum amount is made up of different elements, namely the family element, child element, disability element and severe disability element.

Visit the HMRC website to learn about the  available tax credits. In order to calculate exactly how-much tax credits you will get use the HMRC  tax credit calculator.

Will you be better off accepting Childcare Vouchers as part of a salary sacrifice or claiming tax credits towards your childcare costs? If you're receiving other forms of benefit, whether they are childcare-related or not, learn how tax credits can effect other benefits and discover whether you're eligible for others.

It may be that if the Government change the childcare voucher scheme in 2015/2016, all new joiners that receive tax credits will  not be eligible. Neither will single parent families. So it is important to join a scheme now, as you will be allowed to emain in the current scheme, even though new joiners will not be allowed.


How do child tax credits differ to childcare vouchers?

Childcare vouchers are different to child tax credits. Tax credits are essentially a form of benefit for young persons and working parents depending on their personal circumstances. Learn how you can start  claiming child tax credits.

Child tax credits are one benefit that the Government provides, but childcare vouchers also offer flexible benefits to help working parents too.Childcare vouchers are offered to working parents as part of a Government salary sacrifice agreement with their employer, to help them pay for childcare whilst benefiting from a tax-free amount. Parents with children up to the age of 16 can receive tax saving benefits to pay for childcare, whether it be after-school care, nursery, day care, an au pair, nanny or other registered form of childcare. Both parents can financially benefit from the childcare vouchers. Learn about  Government childcare vouchers, and how  beneficial and easy it is to set-up a scheme.

Make decisions based on your circumstances

And remember, you should always base any decision about using child tax credits and childcare vouchers on your specific circumstances. The information provided above is provided as a guide only - it should not be treated as financial advice or similar, but merely as a general guide. Please visit the HMRC website to learn about  tax credits or speak to a member of the Early Years childcare voucher team for further assistance.


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