I don't post often but seem to have found a way through the maze and found a way to work as a (skint) single parent with a child with SN. I'm not aware of anyone else who's found this route so I thought I'd share in case it's useful to anyone.
My DS gets DLA at the middle rate and I get Carer's Allowance and the extra tax credits etc that go with it and that's really my only income. DS doesn't cope well with groups and would be very stressed if he had to go round to a childminder's house or an after school club and cope with more children. He has 1-2-1 support at school and needs it in any other setting.
The tapers on the childcare element of working tax credit are too steep, so if I take any kind of job at the kind of wages I can earn I end up with less money than I would get in benefits by staying at home but in terms of my own personality I really prefer working.
So I've ended up working for myself; I've set up a Ltd company so that I can re-invest the money I earn into the business to grow it to a size where it can actually support me and DS - so I don't get to take home a wage for now, but I do get Working Tax Credit on top of my existing benefits.
Then I found a nanny for DS - just an ad in the JobCentre and interviewing until I found someone fabulous who's great with DS (possibly I'm lucky in the I live in an area with high unemployment so loads of good candidates), then a long wait (4 months) as she got registered with Ofsted. I'm able to claim back via the Childcare Element of Working Tax Credit 70% of the gross cost of employing her - which means that I get 20 hours per week of childcare (it averages over the year to cover school holidays) for £40 per week out of my pocket; but with the Working Tax Credit at £70pw, I'm actually better off than I was not working.
I did have an argument with HMRC about paying for the cost of a nanny initially as their own internal guidance is not clear and it's been hard work getting it all in place as this is not a well-trodden path, but DS is very happy (he loves the nanny and they do lots of fun stuff together) and I get to work and build something for the future too :-)
Happy to explain more detail if anyone else is thinking of doing it.