Help with fees

Need help with your childcare fees?


Here are a few handy tips about how you can get help with your childcare fees.

As well as the information we have provided you can go to HMRC Childcare Choices https://www.childcarechoices.gov.uk

 

Childcare Choices

  • Early Education Entitlement
  • Tax Free Childcare Scheme
  • Help from Employers
  • Child tax credit
  • Working tax credit

 

Early Education Entitlement is funded childcare for 3 and 4 year olds funded by the government. This is a universal offer, which means it is available for all and there is no eligibility criteria to be met. We are registered to receive the Funded Early Education Entitlement (FEEE), which is available to all children the term after their 3rd birthday up until they reach compulsory school age and covers the cost of up to 15 hours of pre school education per week during term time. 

The FEEE is at the heart of the Government’s vision for all children to have access to high quality early years education. Evidence shows that regular good quality early education has long lasting benefits for all children (Essex County Council, Provider Handbook, April 2017).

Some disadvantaged 2 year olds may also receive the entitlement. Unlike the 3 and 4 year old entitlement this is not a universal offer from the government. This is a targeted offer to a limited number of 2 year olds and is subject to eligibility criteria and an application process. Again it covers the cost of up to 15 hours of education per week during term time. (see below for more information)

As we are open 52 weeks of the year and the entitlement only covers term-time places of 38 weeks per year, spaces are limited for funded term-time only placements. 

The majority of our parents use the 15 hours per week x 38 weeks= 570 hours of funded childcare per annum and pay for the additional hours and consumables they need so that they can keep their child in all-year-round childcare. At Toad Hall we offer flexibility and stretch the 38 weeks up to 52 weeks (still no more than 570 funded hours per annum) so that each term our parents have a fixed amount they pay for additional hours and services. Parents are also able to choose the hours and sessions they want the funding to apply to, which can be a mix of morning or afternoon sessions, full days or nursery days or a combination.

The offer

Up to 15 hours a week over a minimum of two days (if the offer is stretched over more than 38 weeks the hours per week are reduced)

Length of offer

38 weeks or up to 52 weeks for a stretched offer (no more than 570 hours per annum)

Maximum hours per day

10 hours

Number of providers

  • For 3 and 4 year olds, parents can use their 15 free hours over a maximum of two participating providers
  • The FEEE for eligible two year olds may be accessed at one provider only

Times

Not before 7.00am or after 7.00pm

 

A child born in the period

Will become eligible for a funded place

1 April to 31 August

1 September following a child’s third birthday

1 September to 31 December

1 January following a child’s third birthday

1 January to 31 March

1 April following a child’s third birthday

 

In Essex, the entitlement is set to increase to 30 hours per week funded childcare for all 3 and 4 year olds in September 2017, however this is not a universal offer and parents need to check their eligibility on the GOV.UK website. 

To qualify for the full 30 hours of free childcare, both parents must be working; each parent (or the sole parent in a single parent family) will need to earn, on average, the equivalent of 16 hours on the national minimum wage per week, and no more than £100,000 per year. 

Self-employed parents, parents on zero-hours contracts and those on sick or parental leave will be eligible if they meet the average earnings threshold. The additional funded hours will also be available where one parent is employed but the other has substantial caring responsibilities or is disabled.

It is important to note that the minimum threshold is based on money earned, not hours worked – so if a parent works for 10 hours per week but still earns the equivalent of 16 hours at national minimum or living wage, they will be eligible for the 30-hour offer.

In cases where parents are separated, eligibility applies to the parent with whom the child ‘normally lives’. Where the parent of a child has a ‘partner’ – i.e. a person to whom they are married, have a civil partnership, or live with, the eligibility criteria also applies to that partner.

Parents are able to apply now for the 30-hour scheme (as well as the tax-free childcare scheme) through a joint online application developed by HMRC https://childcare-support.tax.service.gov.uk , which includes an eligibility checking system. Once parents successfully apply online, they will be given a code, which they then provide to their chosen provider(s). Providers then use the eligibility checking system to check that the code is valid and if it is, book that child’s place. If no spaces are available parents will need to contact Essex County Council at: early.years@essex.gov.uk who can look for alternative providers for their child.

Parents will be expected to reconfirm their eligibility every three months. Any parents who provide false information about their eligibility can be fined between £300 and £3000 by HMRC.

If a parent’s circumstances change and they become eligible for the 30–hour offer, local authorities are expected to secure a funded place for the child or children ‘as soon as is reasonably practicable’ during the term they become eligible and no later the start of the next term. It is not for providers to find spaces, however parents can always check with their provider or chosen provider to see if they have any spaces.

If a parent’s circumstances change and they become ineligible for the 30-hour offer, local authorities will be required to continue funding their place for a ‘grace period’, which will be the same across the country.  This grace period will be automatically administered through the eligibility checking system.

Any child who is no longer eligible for the 30-hour offer will still be eligible for the universal 15-hour free entitlement offer. 

We will be offering the 30-hours from September 2017, in the same way we deliver the 15 hours. Please note, that as we are open 52 weeks of the year spaces will be limited for funded term-time-only placements and there will be conditions applied to these. We will offer flexibility as we currently offer with the 15-hour funding, which will include offering different patterns of attendance. The actual entitlement is 30-hours x 38 weeks = 1140 hours per annum maximum (compared to 570 hours for the universal offer).

From September 2017, providers will be able to deliver the funded entitlement from as early as 6am,and to as late as 8pm. However, the rule that no session should be longer than 10 hours is remaining, so for example, a funded session that started at 6am would have to end by no later than 4pm. If parents, want their child to stay later they would need to pay the provider for these extra hours and services. There will be no minimum session length. Please note that Toad Hall is open from 7am-7pm.

The government will limit the number of sites on which children can take up their free entitlement in a single day or two. However, there is no restriction on the number of providers that parents can use in a week or a month, although the DfE says that ‘parents and providers should be mindful of the impact on the continuity of care of the child when using a number of providers’. Toad Hall have made it a condition that parents wishing to access the 30-hours will need to choose Toad Hall for the universal 15 hours funding if they wish to split the 30 hours with another provider/s (i.e. want to use less than 30 hours but more than 15 hours with ourselves need to select Toad Hall for the first 15 hours and then other providers after). We will be unable to offer the additional hours if parents do not use Toad Hall for the universal 15 hours funding.

As with the 15-hour offer, the government has stated that funding for the 30-hour offer is only for the provision of early years education and care, and is not intended to cover the cost of consumable items, such as drinks, meals, snacks, nappies, craft supplies or additional services such as music lessons and trips. Please refer to our Fees for the costings.

Hard Facts

Would there be anything to pay if you are accessing the 30-hours? If you are given a free term-time-only space then 'no', so long as you provide your child with the consumable items they need, such as drinks, snacks, lunch, nappies, sun-cream etc. Providers can provide you with a termly costing but it is up to the parent to decide whether they want to pay the provider or provide their own. (Please note, most settings will insist on parents providing healthy snacks and lunches that are nut free) If you are accessing additional hours over the 30-hours and/ or are attending all-year-round then 'yes', you will be charged for the additional hours plus the cost of consumables items. (We would continue to do what we do now, which is to provide parents with a fixed monthly amount for each term so that they know what their costs are). 

Will my child get a place? All settings are limited to the number of children they can take, so if a setting is full and you want a place the answer is going to be 'no', you will need to contact Essex County Council as it is their responsibility to find places. If your child currently attends a setting but again they are full and you want to increase your child's hours so that you take up the 30-hours, the answer is going to be 'no', parents will need to contact Essex County Council as it is for them to find you a place elsewhere for the additional hours you require.  However, if your child attends a setting and you are already accessing 30- hours per week or you are happy with the hours your child attends then you are fine as your child already has a place until they are due to leave for school. 

It's worth checking spaces available and making sure that you have what you need ahead of time. Don't leave it to the last minute. 

All 3-and 4-year-olds will remain entitled to 15 hours of early education per week during term time, regardless of the employment status of their parents.

 

Two Year Olds

The FEEE for two year olds is not a universal offer, only eligible children may access this funding via an application process. Families can apply for funding online, or through a childcare provider, Children’s Center, health visitor, social worker or specialist teacher.

To apply online the parent/carer should go to: https://emsonline.essexcc.gov.uk/CitizenPortal_LIVE/ and register. They then need to Log in and click on ‘Funded Early Education for Two Year Olds’ to complete an application. Once the application is submitted eligibility will be checked and if eligible the applicant will be given a reference number, which they can take to a childcare provider, such as Toad Hall, to access the free place.

Two year olds who meet any one of the following criteria are eligible for the FEEE.

o They meet the criteria used to determine eligibility for Free School Meals as follows:

  • Their family receives Income Support
  • Their family receives Income-based Job Seekers’ Allowance
  • Their family receives Income-related Employment and Support Allowance
  • Their family receives Support under Part VI of the Immigration and Asylum Act 1999
  • Their family receives The Guaranteed element of State Pension Credit
  • Their family receives Child Tax Credit (but not Working Tax Credit) and have an annual income not exceeding £16,190
  • Their family receives Working Tax Credit during the four week period immediately after their employment finishes or after they start to work less than 16 hours per week

o Their family receives Working Tax Credits and have annual gross earnings of no more than £16,190

o They have a current statement of Special Educational Needs (SEN) or an Education, Health and Care plan

o They are entitled to Disability Living Allowance

o They are looked after by a local authority

o They are no longer looked after by the local authority as a result of an adoption order, a special guardianship order or a child arrangements order which specifies with whom the child lives.

Local authorities must ensure that two-year-olds who have met the eligibility criteria set out above continue to receive a place once they have taken it up even if the child ceases to meet these criteria at a later date.

Eligible children may access a FEEE funded place in the term following their second birthday, see table below.

 

A child born in the period

Will become eligible for a funded place

1 April to 31 August

1 September following a child’s second birthday

1 September to 31 December

1 January following a child’s second birthday

1 January to 31 March

1 April following a child’s second birthday

 

Parents/ Carers need to present their child’s birth certificate to the provider, i.e. Toad Hall to confirm their eligibility for the FEEE. Essex County Council may ask to see evidence that the provider has checked birth certificates therefore providers are recommended to make a note of the number to confirm that this has been seen.

 

Information provided on this page has been taken from Essex County Council, Provider Handbook, April 2017 and Pre-school Learning Alliance, A Guide to Early Years Funding and Delivery Changes , 2017.  

 

 

 

Tax Free Childcare Scheme

Overview

Tax-Free Childcare is a new government scheme to help working parents with the cost of childcare.

Parents will be able to open an online account, which they can use to pay for childcare from a registered provider such as Toad Hall.

For every £8 a parent pays in, the government will pay in an extra £2. Parents can receive up to £2,000 per child, per year, towards their childcare costs, or £4,000 for disabled children.

The scheme will be available for children up to the age of 12, or 17 for children with disabilities.

To qualify, parents will have to be in work, and each expecting to earn at least £120 a week. Each parent must not have income over £100,000 per year.

 

Tax-Free Childcare scheme launch to parents

Tax-Free Childcare will be launched from early 2017. The scheme will be rolled out gradually to families, with parents of the youngest children able to apply first.

Parents will be able to apply for all their children at the same time, when their youngest child becomes eligible. All eligible parents will be able to join the scheme by the end of 2017.

Parents will be able to see that we’ve signed up for Tax-Free Childcare

Toad Hall Day Nursery Ltd is already signed up and we appear on the new digital tool, which lets parents search for us so that parents can pay us using Tax-Free Childcare.

Making Tax-Free Childcare payments will be easy

Parents will be able to send Toad Hall payments directly from their Tax-Free Childcare accounts to our bank account (via BACS).

Each child will have a Tax-Free Childcare reference number. Parents need to let Toad Hall know their reference number to help us identify their payments.

 

Tax-Free Childcare: 10 things parents should know

Ten things to know about the new Tax-Free Childcare scheme.

Tax-Free Childcare will be available to around 2 million households to help with the cost of childcare, enabling more parents to go out to work, if they want to, to provide greater security for their families.

 

Keep updated about when you can apply for Tax-Free Childcare.

 

Ten things to know about the scheme:

  1. You’ll be able to open an online account

You’ll be able to open an online account, which you can pay into to cover the cost of childcare with a registered provider. This will be done through the government website, GOV.UK.

Tax-Free Childcare will be launched from early 2017. The scheme will be rolled out gradually to families, with parents of the youngest children able to apply first.

You’ll be able to apply for all your children at the same time, when your youngest child becomes eligible. All eligible parents will be able to join the scheme by the end of 2017.

  1. For every 80p you or someone else pays in, the government will top up an extra 20p

This is equivalent of the tax most people pay - 20% - which gives the scheme its name, ‘tax-free’. The government will top up the account with 20% of childcare costs up to a total of £10,000 - the equivalent of up to £2,000 support per child per year (or £4,000 for disabled children).

  1. The scheme will be available for children up to the age of 12

It will also be available for children with disabilities up to the age of 17, as their childcare costs can stay high throughout their teenage years.

  1. To qualify, parents will have to be in work, and each earning at least £115 a week and not more than £100,000 each per year

The scheme is designed to be flexible for parents if, for example, they want to get back to work after the birth of a child or work part-time.

  1. Any eligible working family can use the Tax-Free Childcare scheme - it doesn’t rely on employers offering it

Tax-Free Childcare doesn’t rely on employers offering the scheme, unlike the current scheme Employer-Supported Childcare. Any working family can use Tax-Free Childcare, provided they meet the eligibility requirements.

  1. The scheme will be available for parents who are self-employed

Self-employed parents will be able to get support with childcare costs in Tax-Free Childcare, unlike the current scheme (Employer-Supported Childcare) which is not available to self-employed parents. To support newly self-employed parents, the government is introducing a ‘start-up’ period. During this, self-employed parents won’t have to earn the minimum income level.

The scheme will be available to parents on paid sick leave and paid and unpaid statutory maternity, paternity and adoption leave.

  1. If you currently receive Employer-Supported Childcare then you can continue to do so

You do not have to switch to Tax-Free Childcare if you do not wish to. Employer-Supported Childcare will continue to run. The current scheme will remain open to new entrants until April 2018. Parents already registered by this date will be able to continue using it for as long as their employer offers it.

However, Tax-Free Childcare will be open to more than twice as many parents as Employer-Supported Childcare.

Employers’ workplace nurseries won’t be affected by the introduction of Tax-Free Childcare.

  1. Parents and others can pay money into their childcare account as and when they like

This gives you the flexibility to pay in more in some months, and less at other times. This means you can build up a balance in your account to use at times when you need more childcare than usual, for example, over the summer holidays.

It’s also not just the parents who can pay into the account - if grandparents, other family members or employers want to pay in, then they can.

  1. The process will be as simple as possible for parents

The process will be as easy as possible for you. For example, you’ll re-confirm your circumstances every 3 months using a simple online process; and there will be a simple log-in service where parents can view accounts for all of their children at once.

   10. You’ll be able to withdraw money from the account if you want to

If your circumstances change or you no longer want to pay into the account, then you’ll be able to withdraw the money you have built up. If you do, the government will withdraw its corresponding contribution.

More information will be available ahead of the scheme being introduced so parents making childcare decisions are able to consider all their options.

Apply Here:   Tax Fee Childcare or visit https://childcare-support.tax.service.gov.uk

 

 

 

Information taken from Gov.UK

 

Childcare vouchers

How childcare vouchers work

Childcare vouchers can save many parents with children aged up to 15 over £1,000 a year on childcare. They are only available via employers, but many large and small companies take part.

The key is they enable you to pay for childcare out of your PRE-TAX and national insurance income. While this doesn’t sound much, the benefit is huge.

It works by 'salary sacrifice'

A few very generous employers will simply give you the vouchers on top of your normal salary, but most will ask you to do what's called a 'salary sacrifice', which, if you're on basic-rate tax, works something like this.

You give up £1,000 of salary ...but after tax & NI that's only worth £700ish in your pocket. In return, you get £1,000 of vouchers... so you're £300 better off.

For more accurate savings figures, look at the childcare voucher calculators on for example Computershare Voucher Services or KiddiVouchers websites. Yet always check first if you're eligible for tax credits - see the tax credit warning below for more info.

Of course, once you no longer need to pay for childcare, you should make sure you get your full salary back. This is always worth checking.

How many vouchers can you buy?

Basic-rate taxpayers can pay for up to £243 of childcare with vouchers each month (£55/week). This is PER PARENT, so two working parents could get £486 of vouchers each month. (This also applies to higher/top-rate payers who joined before 5 April 2011, as long as they don't take a break from the childcare voucher scheme of more than 12 months.)

On 6 April 2011, new joiners paying higher or top-rate tax had their allowance cut so all taxpayers have roughly the same maximum tax saving. The limits in terms of vouchers you can buy are:

  • Basic-rate (20%) taxpayer: £55/week voucher, max annual tax/NI saving £930.
  • Higher-rate (40%) taxpayer: £28/week voucher, max annual tax/NI saving £630.
  • Top-rate (45%) taxpayer: £25/week voucher, max annual tax/NI saving £590.

The number of children you have doesn't affect this, so the limits are the same whether you've one child or an entire Brady Bunch. So, if you can't meet your entire childcare cost using the vouchers, you will have to pay for the rest.

Vouchers tend to last for a long time, so if you know you're going to have higher childcare costs during the holidays, collect vouchers in advance. Beware! Vouchers are usually non-refundable, so don't collect more than you can use.

Also many voucher providers will let you backdate vouchers up to six months, although your child must be born for you to be able to sign up. Check your individual voucher provider's procedures first.

Where to get vouchers from?

Any parent, or those with parental responsibility for a child living with them, is eligible for the vouchers. Yet sadly, to get them, your employer must run a scheme. Follow these steps:

  • Ask your employer if it runs a childcare voucher scheme.
Check with your human resources or personnel department to see if yours does. If you're self-employed as a sole trader, you're not eligible as you're not classed as an employer.
  • What if your employer doesn't offer a scheme? 
Providing childcare vouchers shouldn't cost your employer any money. In fact, as they don't pay national insurance (NI) on the portion of tax you use for vouchers, it actually reduces their costs! 
Firms can offer voucher schemes in one of two ways, either by operating the scheme themselves or by using one of the many voucher companies to do all the admin for them. The fee for this should be less than the firm gains in NI, so they'll still profit.

  • Can my childless friend get vouchers for me through his work scheme?
You can only get childcare vouchers if you've parental responsibility for a child (you either need to be a parent or guardian). You'll sign a declaration you understand this when you apply for the childcare vouchers scheme. 
So you're not allowed to get your childless friend to enter his employer's scheme and buy the vouchers off him. It breaches the voucher scheme's terms and conditions, and HMRC regards it as potential tax evasion.   

Working tax credit for childcare: how do vouchers affect it?

While many people can save by using vouchers, they do come with two warnings - they may reduce your pay and could also affect certain benefits.

Technically you earn less

If you need to sacrifice some of your salary to get vouchers, this can have an impact on other elements of your finances that depend on how much you earn - such as pension contributions, maternity pay and more.

This is only likely to be a minor issue for most and easily overcome by the gain from vouchers, but it's worth being aware of.

Vouchers may affect how much tax credit you can claim

Though the name’s confusing, tax credits are simply a type of benefit you get put into your bank account. Yet it can be a massive amount of cash. The average payout is about £60 a week - over £3,000 a year.

But for a number of people with children (depending on how many) getting childcare vouchers reduces your eligibility for tax credits, potentially leaving you out of pocket.

This is because the amount of tax credit you get depends on how much you pay IN CASH (ie, not vouchers) for childcare. Here’s a simplified example...

The Joneses are entitled to 70% of their childcare costs in tax credits. Pay £100 in cash a week - they get £70 of tax credits. Pay £50 in cash and £50 in vouchers (which they had to buy) and they’re only entitled to 70% of £50 paid in cash, which is £35 of tax credits.

In the first scenario, they meet only £30 of the total childcare costs from their own pocket. But in the second scenario, they've had to buy the childcare voucher (which would have cost them around £35 - the rest is tax/NI savings) plus they'd pay £15 of the rest of the costs, £50 in total. So, in this scenario, the Joneses would have been better off not using the vouchers.

Should I go for childcare vouchers or not?

If you're eligible for the Childcare Element of Working Tax Credit (to give it its full name, see the Childcare Tax Credit section if you're not sure) then you're likely to be better off sticking with ONLY tax credits and not getting vouchers.

There are a few circumstances in which you could still gain getting vouchers. For example, if your childcare costs are above £175 a week for one child or £300 for two or more children.

If you can't claim tax credits, then you'll be better off using vouchers to pay for childcare.

Use the special childcare voucher calculator. There's a special calculator on the Gov.UK site which will calculate if you're better or worse off taking the vouchers.

Warning! Childcare voucher scheme will end in 2018

From April 2018, no new entrants will be able to join the childcare vouchers scheme. If you're already a member, though, you will be able to continue for as long as your employer runs the scheme, or as long as you stay with your employer.

And while this won't be a problem for many as a similar scheme, called Tax-Free Childcare, will replace the voucher scheme, SOME families who are eligible for vouchers, but aren't eligible for the new scheme will lose out massively.

This new scheme was due to launch in autumn 2015, but was delayed by a legal challenge from two childcare voucher providers into the validity of the scheme. The Government was unable to work on the scheme while the court case was ongoing, hence the lengthy delay to the scheme launch. The new scheme will be rolled out in early 2017, starting with the parents of the youngest children, and available to all eligible parents by the end of 2017.

The new scheme: what is Tax-Free Childcare?

Under the new scheme, eligible families will get 20% of their annual childcare costs paid for by the Government. The way it works is that for every 80p you pay into a newly-created Childcare Account, the Government will contribute 20p. This could mean up to £2,000 per child (the scheme assumes a maximum of £10,000 per year childcare costs per child - if you pay more, you won't get more help).

The new scheme will be open to single parents/couples who work 16 or more hours a week, including self-employed, and who pay for Ofsted-registered childcare for a child under the age of 12, or under 17 if the child is disabled.

It will also be open to ALL qualifying parents, unlike childcare vouchers which can only be bought by people whose employer offers the scheme. You can't enrol yet, though.

To be eligible for Tax-Free Childcare, you will need to:

  • Have one or more child aged under 12 when the scheme starts in 2017.
  • Work at least 16 hours a week, being paid the National Living Wage or higher - this means both of you if you're in a couple.
  • Earn under £100,000 a year. This applies to both of you if you're in a couple (so if one earns more than £100,000, then - as a couple - you can't access Tax-Free Childcare).
  • Not be claiming tax credits (this includes the childcare element of Working Tax Credit) or universal credit.

Which scheme will be better for you - childcare vouchers or Tax-Free Childcare?

Well, a lot depends on how much you earn, how much tax you pay, and how much you pay for childcare. In this section, we assume your employer has a childcare voucher scheme that you're eligible to join, so you have a choice.

Here are the winners and losers for each scheme:

Tax-Free Childcare wins for:

  • Self-employed people or couples who earn less than £100,000 each, as they're eligible for Tax-Free Childcare, but can't get childcare vouchers.
  • Parents with more than one child and high childcare costs, as the help available goes up with the number of children. There's a limit for childcare vouchers which isn't dependent on the number of children.

Childcare vouchers win for:

  • Couples where one parent doesn't work, as they're not eligible for Tax-Free Childcare, but the employed parent is eligible for vouchers (provided their employer offers a scheme).
  • Basic-rate taxpayer parents with total childcare costs of £9,336 or less. Under this amount, the saving you make with childcare vouchers exceeds the saving you can make with Tax-Free Childcare.
  • Higher-rate taxpayer parents with total childcare costs of £6,252 or less. Under this amount, the saving you make with childcare vouchers exceeds the saving you can make with Tax-Free Childcare.
  • Higher earners, as anyone earning £100,000+ (or in a couple where one earns £100,000+) isn't eligible for the scheme, whereas these high earners can get childcare vouchers.

What to do if childcare vouchers are better for you

What to do depends on whether you're already signed up to childcare vouchers, or you're only planning to sign up. If already signed up, you don't need to do anything, but if you're not yet signed up, you need to act before April 2018, or you could miss out.

I'm already signed up to get childcare vouchers

If you're already signed up to the childcare vouchers scheme with your employer, then you can continue claiming them until your employer stops offering them, or you change jobs.

I'm not yet signed up

If Tax-Free Childcare won't work out as well for you as childcare vouchers, but you're not yet signed up, then you need to do this by April 2018 or you'll miss the boat. However, this may be easier said than done - your employer will need to offer the scheme, plus you must already have a child to start claiming.

If your employer doesn't offer the scheme, then you could try to persuade them to start offering it, but given there's only one year to run, your employer may not regard it as worth the effort to make the change to the payroll.

If this is the case, you'll just need to pay for childcare entirely yourself until tax-free childcare launches in 2017 (though check if you're eligible to claim).

 

Thank you to Martin Lewis for providing this information. Further details can be found on his website. http://www.moneysavingexpert.com/family/childcare-vouchers

Child Tax Credit 

  1. Overview

You could get Child Tax Credit for each child you’re responsible for if they’re:

You don’t need to be working to claim Child Tax Credit.

You can’t claim tax credits and Universal Credit at the same time. 

How much you’ll get will depend on your circumstances. Child Tax Credit won’t affect your Child Benefit.

Only one household can get Child Tax Credit for a child.

From 6 April 2017, most people will only get the child element of Child Tax Credit for up to 2 children. You’ll still be able to claim it for more than 2 children if they were born before 6 April 2017.

  1. Eligibility

Eligibility depends on:

  • the child’s age
  • if you’re responsible for the child

Use the tax credits online tool to check if you qualify.

You can’t claim tax credits and Universal Credit at the same time.

There has been no change to the rights and status of EU nationals in the UK, and UK nationals in the EU, as a result of the referendum.

The child’s age

To qualify the child must be:

Responsibility for a child

You’re usually responsible for a child if:

  • they live with you all the time
  • they normally live with you and you’re the main carer
  • they keep their toys and clothes at your home
  • you pay for their meals and give them pocket money
  • they live in an EEA country or Switzerland but are financially dependent on you

Contact the Tax Credit Helpline if you’re not sure you’re responsible for the child.

If you share responsibility for a child and you can’t agree who should claim you can both apply. The Tax Credit Office will decide for you.

You can claim for an adopted or fostered child if you’re not getting money from your local council (Health and Social Services Board in Northern Ireland). If you do get money call the Tax Credit Helpline to find out if you can claim.

If the child’s disabled

You may get extra Child Tax Credits if the child either:

You still qualify if Disability Living Allowance, Personal Independence Payment or Armed Forces Independence Payment stops because the child goes into hospital.

Moving to the UK from the EEA

You must wait 3 months before claiming Child Tax Credit if you arrived in the UK from the EEA on or after 1 July 2014 and don’t work. There are some exceptions.

  1. What you'll get

You could get a basic amount of up to £545 a year. This is known as the ‘family element’.

From 6 April 2017, you will only get the family element of Child Tax Credit if you’re responsible for a child or children born before that date.

You could get extra elements on top of the family element.

How much you get depends on things like your income and circumstances, for example if your child is disabled.

This table shows the Child Tax Credit rates for the 2016 to 2017 tax year.

Elements

Yearly amount

For each child (this is known as ‘the child element’)

Up to £2,780

For each disabled child

Up to £3,140 (on top of the child element)

For each severely disabled child

Up to £1,275 (on top of the child element and the disabled child element)

 Use the tax credit calculator to work out how much you could get.

How you’re paid

All benefits, pensions and allowances are paid into an account (a bank account, for example) of the person mainly responsible for the child.

You’re paid every week or every 4 weeks from the date of your claim up to the end of the tax year (5 April), unless your circumstances change.

Your income

Use the tax credit calculator to check if your income is too high for tax credits and work out what money you could get.

There’s no set limit for income because it depends on your circumstances (and those of your partner).

For example, it’s sometimes £26,100 for a one child family but can be higher if you pay for approved childcare or one of you is disabled.

If your circumstances change

Your tax credits can go up or down if your family or work life change - for example, your child leaves home, your income changes or your partner dies.

You must report these changes to the Tax Credit Office.

The benefit cap limits the amount of benefit that most people aged 16 to 64 can get. Some individual benefits aren’t affected, but it may affect the total amount of benefit you get.

  1. How to claim

If you’re new to tax credits you’ll need to order a claim form.

It can take up to 2 weeks for the claim form to arrive and up to 5 weeks to process a new claim.

You don’t need a claim form to tell the Tax Credit Office about a change in your circumstances.

This information has been taken from GOV.UK

 

Working Tax Credit

  1. Overview

You could get Working Tax Credit if either of the following apply:

  • you’re aged from 16 to 24 and have a child or a qualifying disability
  • you’re 25 or over, with or without children

You must:

  • work a certain number of hours a week
  • get paid for the work you do (or expect to)
  • have an income below a certain level

The basic amount of Working Tax Credit is up to £1,960 a year - you could get more (or less) depending on your circumstances and income.

You can apply for Working Tax Credit even if you don’t have children or you’re on leave or about to start a new job.

 

  1. Eligibility

Eligibility depends on your age and how many hours of paid work you do a week. Your income and circumstances will also affect how much you get.

Use the tax credits questionnaire to check if you qualify.

You can’t claim tax credits and Universal Credit at the same time.

Your age

You must be 16 or over to qualify. You must be 25 or over if you don’t have children or you don’t have a disability.

Hours you work

You must work a certain number of hours a week to qualify.

Circumstance

Hours a week

Aged 25 to 59

At least 30 hours

Aged 60 or over

At least 16 hours

Disabled

At least 16 hours

Single with 1 or more children

At least 16 hours

Couple with 1 or more children

Usually, at least 24 hours between you (with 1 of you working at least 16 hours)

A child is someone who is under 16 (or under 20 if they’re in approved education or training).

Use the tax credits calculator to check if you work the right number of hours.

You can still apply for Working Tax Credit if you’re on leave.

Exceptions for couples with at least one child

You can claim if you work less than 24 hours a week between you and one of the following applies:

  • you work at least 16 hours a week and you’re disabled or aged 60 or above
  • you work at least 16 hours a week and your partner is incapacitated (getting certain benefits because of disability or ill health), is entitled to Carer’s Allowance, or is in hospital or prison

What counts as work

Your work can be:

If you’re self-employed

Some self-employed people are not eligible for Working Tax Credit. To qualify, your self-employed work must aim to make a profit. It must also be commercial, regular and organised.

This means you may not qualify if you don’t:

  • make a profit or have clear plans to make one
  • work regularly
  • keep business records, such as receipts and invoices
  • follow any regulations that apply to your work, for example having the right licence or insurance

If the average hourly profit from your self-employed work is less than the National Minimum Wage, the Tax Credit Office may ask you to provide:

  • business records
  • your business plan - find out how to write a business plan
  • details of the day-to-day running of your business
  • evidence that you’ve promoted your business - such as advertisements or flyers

Your pay

The work must last at least 4 weeks (or you must expect it to last 4 weeks) and must be paid.

This can include payment in kind (for example farm produce for a farm labourer) or where you expect to be paid for the work.

Exceptions

Paid work does not include money paid:

Your income

There’s no set limit for income because it depends on your circumstances (and those of your partner). For example, £18,000 for a couple without children or £13,100 for a single person without children - but it can be higher if you have children, pay for approved childcare or one of you is disabled.

 

  1. What you'll get

You get a basic amount and extra (known as ‘elements’) on top of this.

How much you get depends on things like your circumstances and income.

The basic amount is up to £1,960 a year.

Element

Amount

You’re a couple applying together

Up to £2,010 a year

You’re a single parent

Up to £2,010 a year

You work at least 30 hours a week

Up to £810 a year

You have a disability

Up to £2,970 a year

You have a severe disability

Up to £1,275 a year (usually on top of the disability payment)

You pay for approved childcare

Up to £122.50 (1 child) or £210 (2 or more children) a week

Use the tax credits calculator to work out how much you could get.

How you’re paid

Money is paid directly into your bank or building society account, every week or 4 weeks.

You must choose one account if you’re a couple.

Usually, you’re paid from the date of your claim up to the end of the tax year (5 April).

If your circumstances change

Your tax credits can go up or down if your family or work life change if you start a new job, you’re laid off work or your partner dies.

You must report these changes to the Tax Credit Office.

 

  1. How to claim

If you’re new to tax credits you’ll need to order a claim form.

You don’t need a claim form to tell the Tax Credit Office about a change in your circumstances.

It can take up to 2 weeks for the claim form to arrive and up to 5 weeks to process a new claim.

When to claim

You can claim after starting a new job, at any time of the year.

If you’re on benefits (for example Job Seeker’s Allowance or Income Support) you can usually start claiming 7 days before you start a new job.

 

  1. Leave and gaps in your employment

You can get Working Tax Credit for periods when you don’t work. For example, when you:

  • go on maternity leave
  • get sick pay
  • are in between jobs

You’re entitled to the tax credits for a certain period of time providing you qualify.

If you don’t return to work at the end of the period contact the Tax Credit Office.

Circumstance

Period you get tax credits for

You lose or leave your job

For 4 weeks

You’re on maternity leave

For the first 39 weeks of your leave

You’re on adoption leave

For the first 39 weeks of your leave

You’re on paternity leave

For the period of your ordinary paternity leave

You’re on additional paternity leave

Up to the equivalent 39th week of your partner’s leave

You’re off sick

For the first 28 weeks

You’re on strike

For the first 10 days

You’re laid off work

For 4 weeks after you’re laid off or the lay off becomes indefinite

You’re suspended from work - for example because of a complaint

Usually the period of suspension

Qualifying rules

To qualify, you must:

  • have been in paid work
  • have worked the right number of hours before you go on leave or the gap happens
  • have got Statutory Sick Pay or an equivalent benefit if you were on sick leave

You’ll still qualify if you were self employed and you would have been eligible for Statutory Sick Pay or an equivalent benefit if you weren’t self employed.

The equivalent benefits are National Insurance credits (incapacity for work element), Employment and Support Allowance or Income Support (incapacity for work element).

 

 

Information taken from GOV.UK