Child Tax Credit is available for families with children whether or not you are in work. The amount you receive is based on your annual income and will decrease as your income rises. This may be used to cover childcare costs but is not specifically a payment for childcare.
Working Tax Credit supports working people (employed or self-employed) on low incomes. You must be working 16 hours as a single person or 24 hours between you if you are part of a couple, with one of you working a minimum of 16 hours. The amount you receive is based on your annual income and will decrease as your income rises.
Childcare Element of the Working Tax Credit can help towards the costs of registered or approved childcare if you are eligible. The amount you receive is dependent on the household income and your childcare costs. You may be better off using childcare vouchers if your income is high.
Universal Credit is the new single, monthly payment for people who are on a low income or are out of work. All new claimants will access Universal Credit in Wrexham CB from October 2017. If you are currently on other benefits these will be replaced by Universal Credit in the next few years, but you may also be transferred over to Universal Credit sooner if you report a change in your circumstances.
Some employers offer childcare vouchers to their employees. The money comes out of your pay but you do not pay tax or National Insurance contributions on this money. Your childcare provider will need to register with the childcare voucher company in order for you to be able to use this scheme. You can sign up to this scheme until 2018.
The Tax-Free Childcare scheme will be available for all working parents (including self-employed) and doesn’t rely on your employer offering a scheme. This scheme will available from 2017 and the Government will top up the amount you pay into the scheme. If you are already accessing childcare vouchers you continue to access them for as long as your employer continues to offer them.
This calculator will help you to decide whether you’re better off using tax credits or childcare vouchers
The Money Advice Service has a number of practical hints and tips to help you make your money go further as well as a budget planner to help manage your money.
Confidential, practical advice and support with debt issues can be provided by:
- Citizen’s Advice Bureau – 03444 77 20 20
- Christian’s Against Poverty – 0800 328 0006