Tax-Free Childcare, the new government scheme to help working parents with the cost of childcare launched at the end of April and is now being rolled out to parents, starting with those parents with the youngest children first.
The new scheme will see the government pay in £2 for ever7 £8 a parent pays in. With this, parents can receive up to £2000 per child, per year, towards their childcare costs making a total amount of £10’000. There are also higher limits of £4,000 and £20,000 apply for disabled children.
To qualify for Tax-Free Childcare parents and partners in the household must generally meet a minimum income level of on average £120 a week and each earn less than £100,000 a year. The scheme will be available for children up to the age of 12, or 17 for children with disabilities. All eligible parents will be able to join the scheme by the end of 2017.
For those employers who currently offer Employer Supported Childcare, usually in the form of childcare vouchers, these schemes can remain open to new entrants until April 2018. Existing members have the option to remain in their existing scheme or change over to Tax-Free childcare as their child becomes eligible. It is not possible to benefit from tax-free childcare and employer supported childcare at the same time.
D.E.Ball & Co Limited is an established firm of chartered accountants based in Telford, Shropshire. They offer accounts, taxation and business advisory and support services to a wide range of businesses and individuals. For help and advice on what this new Government scheme could mean for you, contact D.E. Ball & Co Limited. Alternatively, visit their website for more information on the accounting and business advisory services they offer.
A calculator for parents comparing the options and guidance on the other government provided free childcare available are available on GOV.UK.