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Updated on 6 April 2024

Tax credits: childcare support

There are two tax credits – child tax credit and working tax credit. You can get one or both of them, depending on your household circumstances. HM Revenue & Customs (HMRC) deal with tax credits. Working tax credit includes an element to help with certain childcare costs.

Tax credits and childcare

Child tax credit (CTC) is paid to people who have children. It is paid separately to child benefit and you do not have to be working to get it.

Working tax credit (WTC) is paid to people who work and are on a low income – it does not matter whether you are an employee or self-employed. You do not need to have children to get WTC but for those who do have children, an extra element can be included in the WTC award towards the costs of childcare.

Claiming help with childcare costs in tax credits

Universal credit is gradually replacing some benefits including working tax credit and child tax credit. Now that universal credit is available across the UK, HMRC state that it is no longer possible to make a brand new claim for tax credits and you must claim universal credit (or pension credit) instead.

If you are already claiming tax credits you will eventually be asked to move across to universal credit by HMRC/DWP – until that happens you will only be affected by universal credit if you choose to claim it, if you need to claim another benefit that universal credit has replaced (such as housing benefit), your circumstances change which ends your tax credit claim or you have been sent a migration notice by DWP/HMRC asking you to make a claim for universal credit. You should get specialist welfare rights advice before claiming universal credit if you are already receive tax credits and want to claim universal credit before you receive your formal migration notice.

There is a childcare element within universal credit, for those who meet the qualifying rules. The rules and the way childcare costs are paid in universal credit is different to tax credits. You can find out more about universal credit in our tax credits and state benefits section.

If you are already receiving tax credits and start paying for childcare, you may qualify for the childcare element of working tax credit. You will need to contact HMRC to tell them about your childcare costs and ask for the childcare element to be added to your working tax credit award. This type of change does not mean you will need to make a claim for universal credit, unless you are required to do so for some other reason.

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