TCTM02630 - Entitlement: WTC entitlement: Childcare element
Definition of a child for childcare purposes
Eligible childcare and relevant childcare charges
In England only
In Wales only
In Scotland only
In Northern Ireland only
Residential Boarding Schools
Definition of a child for childcare purposes
The Working Tax Credit (Entitlement and Maximum Rate) Regulations 2002, Reg. 2 & Reg. 14 (3) and (4)
The childcare element can be paid for any child up to the last day of the week in which falls the 1st September following that child’s 15th birthday: or last day of the week in which falls the 1st September following a child's 16th birthday if the child is registered blind, or has been taken off the blind register within the last 28 weeks, or if the child is receiving Disability Living Allowance, or DLA has ceased to be paid solely because the child is a patient.
(The week begins at midnight between Saturday and Sunday).
Eligible childcare and relevant childcare charges
The Working Tax Credit (Entitlement and Maximum Rate) Regulations 2002, Reg. 14
Relevant childcare charges are charges incurred and paid by the claimant for childcare provided for any child for which they are responsible. Relevant charges must not include any element which is covered by way of an Educational or Childcare Grant, salary sacrifice or any similar schemes. The childcare must be registered or approved. The childcare costs claimed for the childcare element must not include the value of costs which are met by an employer through a salary sacrifice scheme. A salary sacrifice for childcare vouchers can reduce the relevant employment income figure for tax credits as the value of these benefits is not included as income. But any childcare costs declared for the childcare element of WTC would be reduced, as those costs met by the employer are not relevant costs. If the costs are only partly funded by the employer, then the amount in excess of that can be declared as childcare costs (see TCTM04103 and TCTM04215).
Where registered or approved childcare is provided by a person working for the claimant as an employee (for example a nanny), the claimant may claim the costs incurred for employing that person. This may include for example, the gross pay of the employee as well as any employer National Insurance Contributions which the claimant may be liable to pay.
There is no requirement for the childcare to be provided whilst the claimant is at work. For example if a claimant works night shifts, and puts their child into registered or approved childcare during the day whilst they sleep, the costs would still be relevant for tax credits purposes.
Relevant childcare charges do not include
- charges in respect of care provided by a relative wholly or mainly in the child’s home.
- charges in respect of care provided by a relative approved under the Approval of Child Care Providers (Wales) 2007 Scheme or the Tax Credits (Approval of Home Child Care Providers) Scheme (Northern Ireland) 2006 where the care is usually only provided for the child to whom the provider is related.
- charges paid in respect of the child’s compulsory education.
- charges paid by a person to a partner, or by a partner to the person in respect of any child for whom either or any of them is responsible.
Note - A relative means a parent, grandparent, aunt, uncle, brother or sister whether by blood, marriage, civil partnership or affinity.
A partner means a member of a couple making a joint claim.
The Tax Credit (Claims and Notifications) Regulations 2002. Reg. 27
Claimants can notify the commencement of, or change in childcare arrangement up to 7 days in advance of the change occurring.
The Working Tax Credit (Entitlement and Maximum Rate) Regulations 2002, Reg. 14
In England only
- a childcare provider ‘registered’ by Ofsted, either in the Early Years Register or in the compulsory or voluntary part of the General Childcare Register
- childcare provided to a child between 3 and 4 years by a school under the direction of the school’s governing body or an equivalent body, on school premises or premises that may be inspected as part of an inspection of the school by the Chief Inspector
- out-of-school hours childcare or supervised activity based childcare, provided for a child aged between 5 and 15 years (or 16 if disabled) by a school on the school premises, or premises that may be inspected as part of an inspection of the school by the Chief Inspector or by a childcare provider ‘registered’ by Ofsted
- a person ‘approved’ under the Childcare Approval Scheme providing childcare in the child’s home or in other domestic premises. Note - the childcare Approval Scheme in England stopped taking new applications from 1 October 2007 and applicants were directed to apply to the Ofsted Childcare Register for registration. Those already approved under the Childcare Approval Scheme remain approved until their approval expires (maximum 1 year after it was granted). From the 18 July 2009 we cannot accept anyone approved by ‘the Childcare Approval Scheme’ as stated above, they must now register with Ofsted.
- a domiciliary worker or nurse from an agency ‘registered’ under the Domiciliary Care Agencies Regulations 2002 providing childcare in the child’s home.
In Wales only
A childcare provider must be:
- Registered by the National Assembly for Wales through the Care and Social Services Inspectorate for Wales (CSSIW)
- A school that provides childcare outside of school hours and on school premises or a local authority that provides childcare outside of school hours
- a domiciliary worker or nurse from an agency ‘registered’ under the Domiciliary Care Agencies (Wales) Regulations 2004 providing childcare in the child’s home.
- Someone approved by the Approval of Childcare Providers (Wales) 2007 scheme providing childcare in the child’s home or if several children are being looked after, in one of the children’s home, or
- From April 2011 - approved foster carers if childcare is for a child aged 8 or over and takes place outside of the child’s home or for a child aged 16. Otherwise the foster carer must register under one of the provisions above. The child must not be their foster child.
Note: Prior to April 2011 approved foster carers were accepted as childcare providers for tax credits without having to register with the other provisions.
In Scotland only
A childcare provider must be:
- a childcare provider ‘registered’ with the Social Care and Social Work Improvement Scotland (SCSWIS)
- out-of-school-hours childcare clubs ‘registered’ with the SCSWIS, or
- childcare provided in the child’s home by, or introduced through childcare agencies, sitter services and nanny agencies which are required to be ‘registered’.
Note: Someone using a foster carer to look after the child, can be eligible for childcare support in tax credits if the foster carer, like any other childcare provider, is registered with the Social Care and Social Work Improvement Scotland, (this replaced the Scottish Commission for the regulation of Care in April 2011).
Note: Prior to April 2011 approved foster carers were accepted as childcare providers for tax credits without having to register with the other provisions.
In Northern Ireland only
A childcare provider must be:
- Registered with The Health and Social Services Trust
- A school that provides out of school hours childcare on school premises or by an Education and Library Board that provides out of school childcare
- Registered with the Approval of Home Childcare Provider (Northern Ireland) 2006 Scheme, providing childcare in the child’s home, or
- From April 2011 - An approved foster carer if the childcare is for a child aged 12 or over and takes place outside of the child’s home or for a child aged 16. Otherwise the foster carer must register under one of the provisions above. The child must not be their foster child.
Note: Prior to April 2011 approved foster carers were accepted as childcare providers for tax credits without having to register with the other provisions.
The Working Tax Credit (Entitlement and Maximum Rate) Regulations 2002, Reg. 14(2)
Childcare provided outside the UK must be provided under a Ministry of Defence accreditation scheme abroad.
Residential Boarding Schools
The Working Tax Credit (Entitlement and Maximum Rate) Regulations 2002, Reg. 14 (1), (2) and (5)
A person who is incurring and paying relevant childcare charges for a child in a residential boarding school, may be entitled to claim childcare costs providing that the school meets the conditions and those costs do not include any element for compulsory education.
Example 1:
A school charges £7,000 per year for compulsory education, and £1,500 per year for boarding which is provided as an option. The school provides an itemised invoice to show the £1,500 boarding fees. If the customer has chosen to pay for the additional fees for boarding, the childcare costs would be considered as relevant for tax credit purposes.
Example 2:
A school charges £8,000 per year for compulsory education, and breakfast and after school clubs. The fees are the same whether the child attends these clubs or not. The invoice shows that the fees for the clubs are £2,000 per year. As all parents are charged the same whether or not their child attends the clubs, the costs are not allowable.
