07 Apr Tax-Free Childcare – whats it all about?
Tax-Free Childcare takes effect from 28 April 2017
Tax-Free Childcare, the new government scheme to help working parents with the cost of childcare, will be launched from 28 April 2017.
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 making a total amount of £10,000. Higher limits of £4,000 and £20,000 apply for disabled children. To qualify for Tax-Free Childcare all parents in the household must generally meet a minimum income level, based on working 16 hours a week (on average £120 a week) and each earn less than £100,000 a year.
The scheme will be available for children up to the age of 12, or 17 for children with disabilities. All eligible parents will be able to join the scheme by the end of 2017. Any eligible working family can use the Tax-Free Childcare Scheme, unlike the current scheme which relies on employers offering it.
The scheme will also be available for parents who are self-employed which will be a great support to those self-employed parents up and down the country who have so far missed out on childcare support when returning to work.
Parents will be able to apply for all their children at the same time although the government rollout will start with the youngest children first. Parents will need to open an online account, which they can use to pay for childcare (from a registered provider).
A calculator is available on GOV.UK so that parents can check their eligibility for the new scheme and other government provided childcare available at childcare choices or here https://www.gov.uk/childcare-calculator
If you have any questions or queries regarding how you manage this initiative within your payroll function or would like someone else to take over and manage your payroll then please give us a call. EA Assist helps business throughout Norfolk and Suffolk by offering Payroll and Bookkeeping solutions. Contact us now on 01379 646943 or email firstname.lastname@example.org.