Tax Credits and Tax Free Childcare

Tax Credits and Tax Free Childcare

We have heard of some issues where parents have applied for either Tax-Free Childcare or the Extended 30 Hours funding, and finding that their Tax Credits have stopped.

Here is the response we have had from HMRC – 

HMRC have clarified that any parent who applies for Tax Free childcare will immediatelyhave their tax credits claim (working and child) cancelled.  Parents who apply for 30 hours funding only will not have their tax credits claim cancelled but they will need to inform HMRC of their reduced childcare bills from September.

Any parent who has mistakenly applied for Tax Free Childcare can reverse this and reinstate their tax credits by contacting the HMRC helpline on 0300 1234 097.

Parents who are unsure if they are better off on tax free childcare or tax credits should use the childcare calculator at www.childcarechoices.gov.uk.