Tax Credits: Who can claim

Claimants can get help with their childcare costs through the childcare element of working tax credit (WTC). The childcare element is largely covered by Regulations 13-16 WTC (Entitlement and Maximum Rate) Regulations 2002. Although normally paid to the main carer alongside child tax credit (CTC), it is part of WTC and therefore has various work conditions attached to it.

Who can claim childcare?

AND

The claimant is incurring relevant childcare charges for a child for whom the claimant (or their partner) is responsible. Here, charges incurred for childcare are charges paid by the claimant (in a joint claim, by either or both claimants) for child care provided for any child for whom the claimant (either claimant) is responsible.

Coronavirus and childcare

The childcare element continues support continues as normal for those who meet the relevant conditions and incur childcare costs. We explain the conditions to claim the childcare element in the main section of our website

To qualify for the childcare element, working tax credit claimants have to meet certain hours requirements as well as other conditions. Hours that claimants are treated as working under the special coronavirus rules (outlined on our tax credits and coronavirus page) count when considering whether they qualify for childcare support.

During the early stages of the pandemic, some childcare providers shut down but asked parents to continue paying their fees or to pay retainer fees. Under a strict reading of the legislation, childcare costs cannot be claimed if the child is not attending or taking up their place. However, HMRC confirmed that they would continue to pay the childcare element in cases where childcare costs were incurred but the claimant was unable to send their child to the provider due to coronavirus. This concession was withdrawn from 7 September 2020 and childcare costs paid for childcare that does not take place have not been accepted for tax credits from that date.

What does ‘incapacitated’ mean for childcare purposes?

It is important to note that being ‘incapacitated’ is different to qualifying for the disability element of WTC. The meaning is set out in Regulation 13(5)-13(8) WTC EMR Regs 2002. One member of the couple must be working at least 16 hours and one of the benefits/credits listed below must be payable in respect of the other member:

Under the last bullet point, linked periods can include any periods of:

If the claimant is in hospital, but would be getting severe disablement allowance, DLA, PIP, AFIP, AA or an increase of disablement pension if they were not, they will still qualify.

What are relevant childcare charges?

Relevant childcare charges are costs that are incurred for qualifying childcare - charges incurred for childcare are charges paid by the claimant (in a joint claim, by either or both claimants) for child care provided for any child for whom the claimant (either claimant) is responsible. They are calculated in a very specific way, which is covered in more detail in our calculating childcare section.

Not all childcare costs are counted as relevant childcare charges. Only certain types of childcare, those which are registered or approved, count. HMRC produce a childcare guide called WTC 5 which sets out a full list of qualifying childcare (see pages 3-6). For that reason we have not reproduced it here.

Some childcare, even though registered or approved, will not count if it is specifically excluded by the legislation. This includes certain childcare provided by relatives. Of particular note:

In these cases relative means parent, grandparent, aunt, uncle, brother or sister whether by blood, half blood, marriage or civil partnership or affinity.

Also excluded is care provided by a foster parent, a foster carer or kinship carer in respect of a child whom that person is fostering or looking after as the child’s kinship carer. Any charges paid in respect of a child’s compulsory education or paid to or by a partner in respect of a child they are responsible for are also excluded.

What is a child for childcare purposes?

The definition of a child for childcare purposes is different to that for CTC. Childcare is only payable for children until:

Who is responsible for a child?

Childcare costs can only be claimed for a child whom the claimant (or their partner) are responsible for. This has the same meaning as responsibility for CTC purposes and briefly means that:

the child or young person is not:

More information about the responsibility test can be found in the HMRC tax credits technical manual

Last reviewed/updated 12 July 2021