Is it working tax credit or child tax credit that goes towards childcare fees?

[DontBiteTheBoobThatFeedsYou]

Because I've just been told we are eligible for 2 year old funding, but I wasn't sure whether it was worth going for because presumably it would reduce tax credits due to childcare fees reducing.

Basically, is it 6, one, half a dozen of the other?
And a bit of a pointless feat if it makes little difference?

[Wowyouareboring]

Working tax credits I believe

[katmarie]

It's working tax credit. Which covers a max of 70% of your childcare fees. If your child is full time in nursery, then yes your childcare bill will go down, and your WTC will go down too, but not by a huge amount in my experience.

[DontBiteTheBoobThatFeedsYou]

Thank you.

[DontBiteTheBoobThatFeedsYou]

@katmarie

It's working tax credit. Which covers a max of 70% of your childcare fees. If your child is full time in nursery, then yes your childcare bill will go down, and your WTC will go down too, but not by a huge amount in my experience.

That's weird though, we get £20 a week for childcare fees but his fees are £800 a month.

Yet our earnings have been so pitiful (covid and just left uni) that we are entitled to 2 year old funding.

God knows how they work this out.

[katmarie]

I am yet to get to the bottom of how they actually calculate it, I think they deliberately keep it confusing.