Claiming back childcare costs

I am self employed. Can I claim my childcare cost of part of it and offset it as part of my expenses?

Childcare costs can’t be offset against business expenses but there are a couple of options available for help.

For both the self-employed and those in employment, individuals can receive 20 per cent of the costs towards childcare from the government. To qualify you need to open an account – go to to find out more.

The scheme is open to those earning under £100,000 and at least £142 per week who are not receiving Tax Credits, Universal Credit or childcare vouchers. Your children must be aged 0-11 or 0-16 if they are disabled. You, family members or employers can contribute to the account and for every £8 paid in, the government tops it up by £2. This means that, over the course of a year, you could receive up to £2,000 per child. Payments over the £10,000 threshold do not receive the additional government top up.

All families in England, regardless of income, receive 15 hours of free childcare or early years education for 38 weeks each year for children aged two. Some childcare providers will allow these hours to be used over 52 weeks so speak to them to find a solution best for you and your family.

All families in England with three-and-four-year-old children also receive 15 hours of free childcare or early education for 38 weeks and again many providers will agree to stretch these hours to 52 weeks.

All working families in England with three-and-four-year-old children receive 30 hours of free childcare, subject to an income cap, for 38 weeks. This can be used flexibly with one or more providers and some will stretch the hours to 52 weeks to suit your working patterns.

Other help for working families in the UK with children under 16 or 17, if disabled, is via Tax Credits. This covers 70 per cent of childcare costs up to a cap. If you cannot make a new claim for Tax Credits, you may be able to apply for Universal Credit.

Universal Credit for childcare is for working families in the UK with children under the age of 17. They can receive up to 85 per cent of childcare costs as long as they are not receiving tax-free childcare.

Both the Tax Credits and Universal Credits are based on your income levels.

Online calculators can help you work out which is the best option available for you and your family and can help the self-employed where income may fluctuate.

Jo White is Director Tax Advisory at Kreston Reeves.

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Jo White

Jo White is Director tax advisory at Kreston Reeves.

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