HMRC CHILDCARE CALCULATOR: The online tool will help determine if claiming tax credits is best for you.
But, in some cases, you could be better off taking the vouchers from your employer instead.
Parents should use the childcare vouchers better off calculator as a general guide only.
Your actual entitlement for tax credits will get calculated more accurately. This will happen when you report a change in circumstances or make a claim.
Information Needed for HMRC Childcare Calculator
Have the following information prepared before you start because you will need:
- Some details of your income (and your partner) for the current tax year and the previous one.
- Information on how much you spend on childcare costs each week.
- The start date of the vouchers or employer payments.
- The amount of childcare vouchers or payments made by your employer to a childcare provider on your behalf.
Note: There are some special rules for using the child care voucher calculator. Treat direct payments paid by your employer to a childcare provider as if they were vouchers. You can use the online Childcare Indicator Calculator on HM Revenue and Customs website.
Childcare Voucher Eligibility: Better Off Accepting?
As a general rule, many parents will save more money by accepting childcare vouchers. There would be no need to use the childcare voucher calculator if:
- Your employer offers you childcare vouchers eligibility without reducing your pay.
- You have one child who does not usually live with you. An exception would be for a couple whose child lives with a Crown Servant partner who gets posted overseas.
Those Who Cannot Use the Calculator
Paying higher or additional rate tax means you cannot use HMRC childcare calculator.
The childcare voucher calculator eligibility rules also apply to anyone who:
- Is offered more than £55 a week or £243 a month of childcare vouchers. The same applies if your employer pays this amount directly to a childcare provider for you.
- Lives or works in the United Kingdom with a child outside of the UK. An exception applies to couples where the child lives with a Crown Servant partner posted overseas.
- Receives Pension Credit and works at least 16 hours a week.
After the Better Off Calculator Results
The HMRC childcare calculator may find that you would be better off claiming tax credits. The next step is to contact the Tax Credit Office if you do not claim already.
They can also assist if you are already claiming tax credits but not getting enough help with your childcare costs.
The child care voucher calculator might show you would be better off taking vouchers. Even so, you should inform your employer because you might still have entitlement to get some tax credits payments.
Do not include the childcare vouchers as income when you claim tax credits. Also, do not include the amount covered by the vouchers when you calculate the cost of childcare.
Talking the vouchers could mean your childcare payments get reduced by £10 a week or more. In this case you must inform the Tax Credit Office about this within one month.