How do tax credits work WTC childcare?

[lowrib]

So I'm about to go back to work part time, and we'll be employing a childminder, probably only for one day a week. We get tax credits now - WTC for my partner and also CTC.

Am I right in thinking that you get tax credits towards childcare? How do they work - do they pay a percentage of what you pay the CM maybe? How is it worked out?

If anyone could shed some light on this I'd be very grateful. I'm trying to work out how much better off we'll be (if at all - can't say for sure we will be any better off yet) when I start work, and I'm a bit stuck!

You get up to 80% of your childminder's costs as extra WTC. The amount is reduced on a sliding scale according to your income.

Can't calculate an exact amount without knowing all your income details for this and last tax years.

Also you have to work at least 16 hours a week to be eligible.

Sorry but Childminders are sle employed and offer a service.
You do not 'Employ' a childminder.

Sorry to be pedantic!

*self!

Sorry BradfordMum I'm new to this!

I used to be a CM myself, but that was many many years ago. Back then the distinction between what people called CMs and nannies was generally that nannies were expensive and often qualified and CMs weren't!

Obviously things have changed enormously.
The service I provided then would have been called a nanny these days.

As a mum, this new way of doing things seems great actually. I'm really impressed with the professional level of service many CMs provide. But please forgive me if I don't know all the terminology. I'm learning!

Thanks foreverastudent. I'll go and have a play about with www.entitledto.com and see if can work it out. I wish they'd just tell you, I need to know what we can afford before signing up for a CM, not after! Maybe I'll give them a ring actually and see what they say.

You need to read the leaflets WTC2 and WTC5 available from HMRC - Tax Credits Leaflets

foreverastudent: "You get up to 80% of your childminder's costs as extra WTC. The amount is reduced on a sliding scale according to your income."

While sort of right, missed a vital point I feel. There are Weekly Limits to the amount that can be claimed. So it's NOT up to 80% of your childcare costs... it depends on how much the childcare costs are and how many children there are.

From WTC5
The childcare element can help with up to 80% of your eligible childcare costs up to a maximum of:
£175 a week, if you pay childcare for one child. £175 * 80% = £140
£300 a week, if you pay childcare for two or more children. £300 * 80% = £240

Thus if you have 2 children and are paying more than £300 a week for childcare, then you won't get 80% of your childcare costs but can get up to £240 a week.

I know. I deliberatly missed that bit out because OP said she was only going to be using a CM 1 day a week. Since that's not going to cost more than £175 I felt there was no point in providing info irrelevant to this particular problem. The system's confusing enough!

How very true, it is confusing. However I wouldn't want someone reading this thread in a slightly different situation to the OP thinking that there were not any weekly limits.

Thanks for your help everyone, some very useful info here.

I just spoke to the Tax Credits helpline people and they were very helpful indeed actually.

They say if I let them know our income and how much we expect to pay, they'll calculate how much childcare they will cover - we don't have to actually claim it first.

I've spent the last few months dealing with the job centre who were totally dysfunctional. They completely cocked up my claim, kept changing their mind about whether I was entitled to anything (I was entitled to contribution-based JSA but it took over 3 months and 5 detailed applications not to mention about 30 hours of my time before they paid up!) also telling me contradictory things, losing my paperwork and sending me letters which were self-contradictory. (Tempted to send the letters to the press actually, they are so totally ridiculous!)
So, my expectations were low so say the least!

I'm pleased to say I'm pleasantly surprised by the tax credits people - turns out they will actually have a sensible conversion with me about what I'm entitled to and how it works, which is more than I ever got out of the job centre!