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Tax-Free Childcare Scheme

Could you benefit from the new Tax-Free Childcare Scheme that was introduced in autumn 2015?

The government will provide 20% support on childcare costs up to £10,000 per year for each child via a new simple online system. This means support of up to £2000 per year per child from the government.

TFC Twitpic v4

The Simple Facts

  1. Through the government website you’ll be able to open an online account, which you can pay into to cover the costs of childcare with a registered provider.
  2. For every 80p you (or someone else) pay in, the government will top up by 20p. The government tops up the account with 20% of childcare costs, up to a total of £10,000 – the equivalent of up to £2000 support per child, per year.
  3. The scheme will be available for children up to the age of 12. For children with disabilities, the scheme will be available up to the age of 17.
  4. To qualify, parents will have to be in work, and each earning just over an average of £100 per week and not more than £100,000 each per year.
  5. Any eligible working family can use the Tax-Free Childcare Scheme, it does not have to be through an employer.
  6. The Scheme is available for parents who are self-employed.
  7. If you currently receive Employer-Supported Childcare, you can continue to do so. You do not have to switch to Tax-Free Childcare if you do not wish to.
  8. Parents and others can pay into the scheme whenever they like.
  9. You’ll be able to withdraw the money you put into the account if you want to. If you do, the government withdraws its corresponding contribution.

For more information click here to check out the government article on their Tax-Free Childcare Scheme.

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Posted in: Blog, Tax, Uncategorized