Calculating Childcare Costs

Working tax credit and calculating childcare costs

working tax credit

If you have to pay childcare cost after one or more children you can opt for receiving Child Tax Credit however it’s sometimes not easy to calculate all the costs you have when it comes to the question as to what costs of childcare you should state that you have. This claim can be made 7 days before you are to start to pay childcare cost.

What’s been settled is, that there is an options for those who are to pay childcare and have a salary under or minimally over the monthly minimum wage to receive tax credit, which cannot surpass 70% of the total childcare cost. However, the question is, how to count all this out by yourself? The key to the correct calculation is first of all to make sure you only count the money you do actually pay.

When it comes to the calculation of the correct sum make sure you do not include one or more of the below mentioned costs or benefits:

Childcare payments from an employer – may they be in form of vouchers or money

Childcare vouchers in return for a lower salary ( also called as salary sacrifice)

Childcare payments or childcare grants from a governmental body.

Extra costs paid by an educational or other local governmental body. This includes free nursery courses or other free learning options.

Working tax can also be applied by those who have custody over one or more children and who are either between 16-24 years of age or those who are over 25 years old. The only main condition of application is that the applicant has to prove that he/she holds a position where he/she works a minimum of 16 hours a week. There are other helping options in form of Child tax which can be opted for up until the time your child or children reach 16 years of age.

There are also other specific scenarios when Child Tax can be claimed as a benefit, for instance if a child or teen over 16 years of age opts to study at one of the educational facilities approved by the Tax Credit governmental office. In this case education is fully or partially paid by the tax Credit office.

Apart from Child and Working Tax credits (one can also apply in couple or in parallel for the two credits) there are several other benefits which one can choose from. Therefore always consult with someone at your local nursery centres or other childcare institutes in order to find out what’s the best suitable option for you. Bear in mind that if you apply for Universal Credit, it will automatically close out the possibility to receive any other benefits from Tax Credits.

Check out the Child Tax and Working Tax information on the governmental website. There you can also get to find a more detailed information, a calculation sheet and an online application form which will help you with the remainder of your application.