What is qualifying childcare?
Not all childcare will qualify for support through the childcare element of working tax credit. They must be relevant childcare charges to qualify.
What are relevant childcare charges?
Relevant childcare charges mean childcare 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 authority to make sure their status is current and you should make sure that they renew their registered or approved status each year.
The rules vary depending on where you live. A full list can be found on Pages 3 to 6 of WTC 5 published by HMRC.
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.
What does not count as a relevant childcare charge?
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 is also excluded.
If your employer gives you childcare vouchers (either in addition to your salary or as a salary sacrifice) you must deduct the amount of these vouchers from your costs. See our interactions section for more information.
Can I claim if a relative provides my childcare?
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. Childcare provided by foster carers, foster parents and kinship carers is generally excluded.