Qualifying childcare costs for tax credits
Not all childcare will qualify for support through the childcare element of working tax credit. They must be relevant childcare charges to qualify.
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Relevant childcare costs for tax credits
Relevant childcare charges are those costs you pay for childcare for children you are responsible for (based on the child tax credit definition of responsibility). Childcare means care provided for a child that is registered or approved by the appropriate authorities, such as Ofsted. Your childcare provider should be able to provide you with a registration number. It is important you check with the relevant authority to make sure your provider’s status is current and you should make sure that they renew their registered or approved status each year.
The exact rules vary depending on where you live. A full list of the rules in England, Wales, Scotland and Northern Ireland can be found on Pages 5 to 9 of HMRC's booklet WTC 5 published by HMRC.
Face to face tuition will generally be included in the definition of childcare because there is an element of care provided. HMRC’s position is that tuition provided online – even if given by a registered or approved provider – will not count as childcare for tax credit purposes. The rules may be different for Tax-Free Childcare and Universal Credit. Further details about online childcare can be found on our online childcare page.
If you use childcare that is not registered or approved then you will not qualify for help with childcare costs through tax credits. If your provider was registered and then that registration lapses, you must inform HMRC immediately otherwise you may be overpaid tax credits.
Childcare that is not relevant childcare
Care provided by a foster parent or kinship carer in respect of a child they are fostering or looking after as a kinship carer is excluded.
Any charges paid for your child’s compulsory education are also excluded.
As explained above, we understand HMRC’s position is that online tuition/online childcare will not count as childcare that can be claimed for.
If your childcare provider is a relative
There are special rules if your child is looked after by a relative. A relative includes a parent, grandparent, aunt, uncle, brother or sister whether by blood, half blood, marriage, civil partnership or affinity (for example a partner).
If a relative is a registered childminder and looks after the child away from the child’s home, the childcare will qualify. If the care is provided in the child’s home, even if the relative is a registered childminder, it is excluded and you cannot claim the childcare element.
If your relative is an approved childcare provider in Northern Ireland or Wales, the childcare can be qualifying if it is provided away from the child’s home and the relative also cares for at least one other non-related child.