Baines Jewitt News
New Tax-Free Childcare for Working Families
Working parents, including the self-employed, could receive up to £2,000 per child per year towards childcare costs via a new tax scheme.
‘Tax-Free Childcare’ was launched by the government at the end of April and officially starts from September this year.
How much parents pay into their Tax-Free Childcare account, and when, is up to them. Parents will use their account to pay the childcare provider of their choice, as long as the provider is approved by a UK regulator and registered with the Tax-Free Childcare scheme.
To qualify for help through Tax-Free Childcare, parents need to be ‘working parents’ paying for ‘registered childcare’ for children under 12 (or under 17 for disabled children). If parents are not living together, the qualifying parent depends upon with whom the child usually lives.
The main criteria for a parent are:
The Tax-Free Childcare initiative will eventually replace Childcare Vouchers. Employees cannot benefit from Childcare Vouchers provided by their employer and Tax-Free Childcare. They are free to stick to the existing vouchers or opt for the new Tax-Free Childcare scheme. There are winners and losers when the two schemes are compared and for some it will be a difficult choice.
“As one of Teesside’s largest firms of chartered accountants, we are keen to help local people maximise earning potential and make their money go further. The new Tax-Free Childcare scheme supports working parents and could save many households thousands of pounds each year, by making childcare more affordable. This is also the first childcare scheme providing a tax break for the self-employed,” explains Trevor Cook, partner, Baines Jewitt.
Tax-Free Childcare, Childcare Vouchers and 30 hours free childcare are separate government programmes to help parents with the cost of childcare. To check the full eligibility criteria, to find out more or to apply, visit the government’s new Childcare Choices website www.childcarechoices.gov.uk
For more information, contact Baines Jewitt on 01642 632032