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Why you need to work out your childcare costs

You need to work out your average weekly costs accurately if you’re:

• claiming help through tax credits for your childcare costs
• already getting tax credits and your childcare costs change - you may need to report a change in circumstances

Otherwise you may get paid too much - or not enough - tax credits.

What not to include in your costs

Only include childcare costs you actually pay yourself when working out your average weekly costs.

Don’t include costs covered by any of the following:

• childcare payments from your employer - either in money or childcare vouchers
• childcare vouchers in return for a reduction in your pay - this is called a 'salary sacrifice'
• childcare payments or grants from a government scheme, for example to help you start work or because you are a student
• childcare costs met by your educational or local authority for your child’s nursery childcare

You're claiming and you've been using childcare for less than a year

Use this table to help you work out your childcare costs.

If you haven’t started to pay for childcare yet, ask your provider what they are going to charge you.

You're claiming and have been using childcare for a year or more

The way you work out your costs depends on whether you always pay - or expect to pay - the same childcare costs throughout the year.

You always pay - or expect to pay - the same costs

Use this table if you always pay - or expect to pay - the same childcare costs throughout the year. These are called 'fixed amounts'.

• Contact details for the Tax Credit Helpline

You pay - or expect to pay - different amounts

Sometimes you may pay - or expect to pay - different amounts for childcare (known as ‘variable costs’).

For example you regularly use childcare, but may pay more - or less - during school holidays than you do at term time. This could be because the hours you use childcare for change from week to week or month to month.

Work out your costs as follows:

• add up how much you have spent in total over the last 52 weeks (or 12 months if you pay monthly or any other frequency) - start backwards from the date you’re doing the calculation
• divide this figure by 52
• round up your answer to the nearest whole pound

You're claiming and you only use childcare for short periods once in a while

You might not normally use childcare except for short, fixed periods once in a while. 'Fixed' means that you know when your childcare will begin and end. This could be during the school holidays or to cover an emergency.

You don't need to work out your average weekly childcare costs yourself. Call the Tax Credit Helpline - they will do it for you. When you ring them, have the following information to hand:

• the start and end date of the childcare
• your actual childcare costs for the short period
• your childcare provider's details - their name, address, phone number, childcare registration or approval number (your childcare provider will be able to give you this information)

• Contact details for the Tax Credit Helpline

You’re already getting tax credits for childcare costs - and your costs change

If your childcare costs have changed or are about to change, you will need to work out your new weekly childcare costs. Use the date your childcare costs changed as your starting point.

Make sure you report the change that applies to you to get the correct tax credits payments.

• Childcare changes - effect on Working Tax Credit

You don’t know your old average weekly costs

If you’re not sure what your old average weekly childcare costs were, you can do one of the following:

• check your award or renewal notice - this tells you what the Tax Credit Office used as your average weekly childcare costs
• let the Tax Credit Office know your new average childcare costs - they will tell you if it is a change that affects your tax credits

• Contact details for the Tax Credit Helpline

More useful links

• Help with childcare costs - do you qualify for extra tax credits?

• Children with disabilities - can you get extra Child Tax Credit?

Useful contacts

• Tax Credit Helpline - contact details