2 really quick q's about the 15 hours funded childcare

[MilkshakeMaker]

Hello, I just was wondering, when you claim the 15hours free funding does your tax credit go down as your childcare isn't as much? As in, in one hand out with the other?

And if that is the case do we HAVE to claim it?

Thanks for your help,

I don't know about the tax credit but you don't claim it through your bank account, it is claimed on your behalf by the nursery/pre-school/childminder etc. and goes directly to them.

If childcare costs go up or down by 10 pounds or more a week then you do need to notify tax credits yes.

Yes I know, what I mean is technically the amount of childcare you pay each week is reduced, so surely the tax creds would be too?

Thank you RedHelen, so now I just need to find out if its compulsery....

They might do, but it will still be in your interest to claim the 15 hours. Tax credits cover a maximum of 70percent of the total cost, but the free hours are 100 pc of those free hours. Most nurseries if your dc is in full time will spread it out so it covers school holidays too.

You should still be better off though even if you do claim it. I think tax credits might do a compliance review if they twig a child is 3 or at school & the amount claimed for hasn't changed.

It is not compulsory to send your child to pre-school/nursery. So whilst the funded hours are available you don't have to take them. However if you are using a childcare provider who provides the non-funded hours plus the funded hours then you would take them, wouldn't you?

Keep in mind that the 15 hours a week may only be the funded hours your child gets if they attend 5 days a week. If they attend less days, they may get less hours - it depends on how many funded hours the provider is able to put though each day. Some local authorities publish a EYEE Provider Guide which details the funding arrangements in that local authority.

There are also limits, such as 210 hours per term - a limit I have seen recently in a local authority. Another limit is 38 weeks a year. So find out from your education provider as to how many hours and during which weeks the funding applies for your child.

So when doing your tax credits claim you need to work out your costs over the year, to then work out the average cost. WTC5 from HMRC explains how to do the calculation.