Parents and guardians could receive up to £2,000 a year per child per year towards childcare costs.
You could receive top-ups of £2 for every £8 you pay into a tax-free childcare account, up to a maximum of £2,000 per child. This is available to all working parents or guardians with children under 12, or under 17 if disabled.
All you have to do is open an online account and decide how much to pay in. Your circumstances are re-confirmed every three months online. Anyone can pay into this account, including grandparents, employers and other family members, which provides the flexibility to vary the amount paid into the account.
As soon as the money is taken out of the account the government contribution is lost.
To qualify for the government contribution, account holders will usually have to be in work, expecting to earn at least the National Minimum Wage (NMW) or Living Wage (LW) for 16 hours a week on average, over the next 3 months.
Self-employed people who do not expect to make enough profit in the next 3 months can use an average of how much they expect to make over the current tax year. Additionally, the earnings limit does not apply to self-employed individuals who started their business less than 12 months ago.
Unlike the previous childcare scheme, tax-free childcare does not rely on employers offering it. Any working family can use a tax-free childcare account, provided they meet the eligibility requirements.
The Childcare Choices website includes a childcare calculator for parents to compare all the government’s childcare offers and check what works best for their families, including the 30-hour free childcare offer, tax-free childcare or universal credit.
If you are unsure about this scheme please call Vincent & Co on 01803 500500 and we will discuss your circumstances in confidence.