Childcare vouchers from your employer may affect the amount of tax credits you get. This calculator can help you decide if you would be better off taking childcare vouchers or not. It’s just a guide and your actual tax credits entitlement is worked out when you make a claim or report a change in circumstances.
Start now on the HM Revenue & Customs website
Before you start
- details of your income (and your partner’s if you have one) for this and the last tax year
- your weekly childcare costs
- the amount of childcare vouchers or payments your employer makes directly to a childcare provider for you
- the start date of the vouchers/employer payments
If your employer makes direct payments to a childcare provider, treat those payments as if they were vouchers when using the calculator.
Who doesn’t need to use the calculator
You don’t need to use the calculator in the following cases as you’ll be better off accepting childcare vouchers:
- if you have 1 child and they don’t normally live with you (unless you’re in a couple and your child lives with your Crown Servant partner posted overseas)
- your employer offers you childcare vouchers without reducing your pay
Who can’t use the calculator
You can’t use the calculator if you pay higher or additional rate tax.
You also can’t use the calculator if:
- you’ve been offered more than £55 a week or £243 a month of childcare vouchers (or your employer pays this amount directly to a childcare provider for you)
- you live or work in the UK but you have a child outside of the UK (unless you’re in a couple and your child lives with your Crown Servant partner posted overseas)
- you’re on Pension Credit and work 16 hours or more a week
If you’d be better off claiming tax credits
- you’d be better off claiming tax credits and you don’t already
- you’re already claiming tax credits but not getting help with your childcare costs
If you’d be better off taking vouchers
Let your employer know.
You may still be entitled to some tax credits payments. When you claim don’t include the childcare vouchers as income. When you work out your childcare costs don’t include the amount covered by the vouchers.
If you take the vouchers and your childcare payments are reduced by £10 a week or more, you need to let the Tax Credit Office know within 1 month.