Tax Free Childcare : Top things you should know
The new scheme is finally being rolled out. It will be available for children up to the age of 12, or 17 for children with disabilities.
Parents will be able to open an online account, which they can use to pay for childcare from a registered provider, this includes Ofsted Registered Nannies.
The scheme will be rolled out gradually to families, with parents of the youngest children able to apply first.
What is the Tax Free Childcare Scheme?
For every £8 a parent pays in, the government will pay in an extra £2. Parents can receive up to £2,000 per child, per year, towards their childcare costs, or £4,000 for disabled children.
Who is eligible for the Scheme?
To qualify, parents will have to be in work, earning the equivalent of 16 hours at minimum wage per week and not more than £100,000 per year. Tax Free Childcare is for households where all parents are working; both parents if they live together, a single parent, or the biological parent of the child and their partner (if they live with the child).
If I am Self Employed am I eligible?
Yes. The government is supporting newly self-employed parents with a ‘start-up’ period. During this, self-employed parents won’t have to earn the minimum income level.
How Do You Join the Scheme?
If a family qualifies for Tax-Free Childcare, they will need to register online via a government website giving details on their household, work and child, and the government will confirm eligibility. Once eligibility is confirmed, an online child account will be opened. Parents will need to reconfirm their eligibility every quarter, in case their circumstances change.
How do you manage the scheme?
The scheme will be managed via an online site, into which parents can make either regular or one off payments. The government will then ‘top up’ the account, adding 20% up to a maximum of £10,000 per child per year.
What is the difference between this and the current scheme?
The new Tax-Free Childcare doesn’t rely on employers offering the scheme. Any working family can use Tax-Free Childcare, provided they meet the eligibility requirements. The new scheme is based on each child not each parent like the current scheme.
There is some more information including a calculator to see how much you can save on this website http://www.tax-free-childcare.info