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What are childcare vouchers and working tax credits, and do I qualify?

A helping hand with your childcare costs.

Childcare Vouchers

Childcare vouchers helps towards your Nanny, Childminder or nursery costs with your income which is exempt from Tax and National Insurance, saving you a little bit of money each week.

The maximum value of childcare vouchers you can use per month per parent to pay for childcare is £243. These childcare vouchers will only technically cost you £173 as you do not have to pay tax or National Insurance on the £243. This means savings of up to £962 per year. Higher-rate taxpayers can save up to £1,196 per year.

Tip: If you need help paying your Nannies National Insurance and PAYE Tax please see our information for parents employing a Nanny.

Do I qualify for Childcare Vouchers?

  • To qualify for Childcare Vouchers your Nanny, Childminder or nursery must be registered with Ofsted
  • A Nanny must hold a UK childcare qualification & current peadiatric first aid certificate (your Nannies first aid certificate will have an expiration date on it so you will know if it is valid). A Nanny may complete a 2 day “childcare induction course” if s/he does not hold a UK qualification. These courses cost between £70 and £260 and are available through Findababysitter.com
  • Nanny Ofsted registration costs £155 per year, which covers the cost of getting a DBS check (formally known as CRB) Even if your nanny holds a current DBS disclosure s/he still needs to complete one with Ofsted
  • Your Nanny must re-register with Ofsted annually
  • For you to qualify for childcare vouchers your employer needs to be registered with a company who supply the vouchers
  • Even if your Nanny is not yet registered with Ofsted you may be able to start collecting vouchers which you can then pay your Nanny with once she is registered. Not every childcare voucher provider allows for this though
  • There is no limit to how much a nanny or childminder can be paid weekly in childcare vouchers – only parents are limited by their childcare voucher allowance (£55 per week per parent)
  • A child qualifies for childcare vouchers up to the 1st of September following their 15th birthday or if the child is disabled up to the 1st of September following their 16th birthday

For more information visit: www.ofsted.gov.uk

Working Tax Credits

Working Tax Credits which contribute to childcare costs are for lower income families. You can get up to 80 percent of what you pay in childcare, to a maximum of £175 per week for one child or £300 per week for two or more children. The amount you get depends on your income. The lower your income, the more tax credits you can get.

Do I qualify for Working Tax Credits?

  • To qualify you must work for at least 16 hours a week.
  • You can usually claim tax credits for a child who lives with you until September 1st after their 16th birthday.
  • If your child is between 16 and 19, you can still claim tax credits for them if they are:

a) In full-time education, up to and including 'A' levels, NVQ level 3 or Scottish Highers

b) In approved training e.g. Entry to Employment, Skillbuild and Get Ready for Work

For more information about Working Tax Credits visit the HM Revenue and Customs website.