A tax credit guide for self-employed parents - Contact a Family

• a couple where one member of thecouple works 16 hours or more a weekand the other is entitled to Carer’sAllowance, or• a couple where one member works 16hours or more per week and the otherreceives certain disability/incapacitybenefits (or they are in hospital or prison).Before April 2012 it was not possibleto get help with childcare costs if onepartner worked 16 hours or moreand the other was entitled to Carer’sAllowance. If you are in this category andhave been paying for childcare, makesure that you tell the tax credits officeabout this, so that you can start to haveyour childcare costs taken into account.What type of childcare can be takeninto account?Only registered or approved childcarecan be taken into account. This includesregistered childminders, nurseriesand other schemes run by approvedproviders. Care in the child’s own homecan also be counted if it is provided bysomeone who is registered. Childcareprovided by a relative in the child’s homeis not counted – even if that relative isa registered childminder. Dependingon where in the UK you live, you mayalso be refused help with the costs ofregistered childcare provided by a closerelative in their home.If a child is on Disability Living Allowance(DLA) or is registered blind, childcarecosts can be included until theSeptember after their 16 th birthday.Otherwise, childcare costs can only beincluded until the September after their15 th birthday.The amount of childcare costs that canbe includedThe maximum amount of childcare thatcan be taken into account is £175 perweek for one child, and £300 per weekfor two or more children. Only 70 percent of childcare costs can be met. Thismeans that the most that can actuallybe included towards childcare costs is£122.50 per week (70 per cent of £175)for one child, and £210 per week (70 percent of £300) for two or more children.These are the maximum amountspayable and the actual amount that youwill get depends on your income andfamily circumstances.If I get extra tax credits towards mychildcare costs will this affect anyHousing Benefit or Council Tax Benefitthat I get?You should always tell the office thatpays you Housing Benefit or CouncilTax Benefit about any changes to yourtax credit payments. But in most casesthese benefits will not be reduced if youstart getting extra tax credits towardschildcare costs. This is because of aspecial earnings disregard (the amountof money that is not counted) that islinked to your childcare costs whencalculating these benefits. However,no special earnings disregard appliesif you are a couple where one partnerworks 16 hours and the other is entitledto Carer’s Allowance. Couples in thiscategory are likely to find that the extratax credits they get towards childcareleads to a reduction in Housing andCouncil Tax Benefit payments.6A tax credit guide for self-employed parents