The Tax-Free Childcare Scheme is a new government initiative aimed at helping 2 million households
with the cost of childcare.
The scheme was launched in April this year. It will be rolled out gradually during 2017.
The scheme is available for those with children up to the age of 12 years, or to the age of 17 years for
children with disabilities.
To qualify, parents must be in work, each earning at least £120 a week and not more than £100,000
each per year. The good news is that it will also be available to the self-employed. Unlike the existing
Employer-Supported Childcare Scheme.
You’ll be able to open an online account, which you can pay into to cover the cost of childcare with a
registered provider, the government adds £2 for every £8 you contribute.
Though the scheme was launched with great promise there have been delays which have caused
expense and disruption for many families. HMRC is offering compensation to those who have been
affected. In some cases, a one-off top-up maybe available towards tax-free childcare. The government
department will also consider refunding reasonable costs incurred.
To qualify for these payments an individual must have:
- been unable to complete the application for Tax-Free Childcare
- been unable to access their childcare account
- not received a decision about eligibility, without explanation, for more than 20 days.
If you are an employer and currently offer the Employer Supported Childcare Vouchers, the new
scheme will be available for new entrants until April 2018. Members can choose to continue with the
voucher scheme or switch to the new online initiative, however, it is not possible to use both.
An online calculator is available for parents comparing the options available with government
provided childcare schemes here.
To find out more please visit the link below or speak with us for more information.