Tax credits supplement your income. They are means tested and the amount of money available depends upon your family circumstances, the number of hours you work and your household income.
The combined value of the tax credits available to you can vary between a disappointing 'nothing' to a rather helpful £15,000 (or more) per year.
Although the process of claiming the credits can be a little involved they are well worth investigating. There is a useful calculator at EntitledTo which gives an estimate of what, if anything, you can expect to receive.
There is information at HM Revenue & Customs (HMRC) although conspiracy theorists will note it can be difficult to extract! More useful, perhaps, are a couple of "Directgov" fact-sheets which are linked to below.
There are two aspects of the tax credit scheme of particular relevance for nursery school and out of school club parents.
Child Tax Credit
You may be eligible to receive financial assistance towards the cost of raising your family.
- You do not need to be a working parent to qualify
- You don't need to be using a childcare facility
HMRC pay the benefit directly into the bank account of the child's main carer. The child tax credit scheme has two elements:
- a family element paid to any family with at least one child. This may be worth up to £545 per year
- a child element paid to each child in the family. This could be worth up to £1,690 per child per year
The benefit is based on circumstances and the amount of money available varies accordingly. Families with an income up to £58,000 (or £66,000 if you have a child under the age of one) may be eligible for some level of additional income.
You can learn more from the Child Tax Credit Fact-sheet (on Directgov's site).
Working Tax Credit
Working tax credit can be especially helpful if you have children. The amount of money available depends upon your circumstances (which include how much you earn). Generally, the tax credit is paid directly into your bank account by HMRC.
Like the child tax credit, the working tax credit has elements. If you have childcare fees to pay, an important one is the childcare element.
This element of the Working Tax Credit helps working parents cover some of the cost of approved childcare.
At its best, it can be worth up to 70% of your childcare fees. If you have one child the maximum you could actually receive is £122.50 per week. If you have two or more children the maximum is £210 per week.
To be eligible for the childcare element of Working Tax Credit you must be working at least 16 hours per week if you are a lone parent. Both partners in a couple must work at least 16 hours per week. The childcare element of the Working Tax Credit is paid directly into the bank account of the child's main carer.
You can get more information from this Working Tax Credit Fact-sheet on Directgov's website
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