The childcare element of the working tax credit (WTC) can be a key source of support in helping parents with the cost of childcare. While many already have an understanding of how it works, it is worth checking from time to time that the information they hold is up to date. Nurseries may also want to consider embedding promotion of the childcare element of WTC into existing procedures. By raising awareness of the support available to meet childcare fees, nursery owners can help improve occupancy figures and therefore improve sustainability.
The facts
- The childcare element of the WTC should not be confused with the Child Tax Credit.
- The amount that a parent can claim is based on circumstances and income.
- A lone parent must be working at least 16 hours per week and paying for Ofsted registered childcare. In a couple, both parents must be working at least 16 hours.
- Up to 80 per cent of total childcare costs can be covered, to a maximum £175 a week for one child and £300 a week for two or more.
WHAT NURSERIES CAN DO
- When responding to new enquiries, mention that parents may be able to access support via the childcare element of WTC.
- Raise this issue any time fees are discussed.
- If fees change by more than £10 a week, advise parents to inform Revenue and Customs. This could be as a result of a price increase, or a decrease when grant support is offered as a result of the free entitlement.
- If parents advise the nursery of a change in circumstance, remind them they may also need to advise Revenue and Customs. Examples would include a change in the number of hours worked, or changes in a parent's relationship. Strike action that exceeds ten working days is also relevant.
- If your Families Information Service (FIS) offers a tax credit calculator service, refer parents to obtain an estimate.
- Invite your FIS to promotional events.
- Promote the tax credit helpline number which is 0845 300 3900.
For information visit www.direct.gov.uk or www.taxcredits.inlandrevenue.gov.uk