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Wednesday, 31 August 2016 20:52

Back to school and Tax free childcare

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Back to school (at last)!

 

Every parent knows that the summer holidays can be really taxing when it comes to childcare!

For most of us that means juggling work commitments, and relying on family and friends. 

It can also mean paying for private childcare.

Now that the summer holidays are coming to an end and it’s time to head back to school, there is some really good news for parents who do pay for private childcare.

Tax-free childcare is coming!                                        

Childcare will never be stress free, but from 2017 it will be tax-free.

There are some big changes being made to make childcare much more affordable for working families. 

Tax-free childcare will be available to around 2 million households.

How will it work?

Tax-free: when you pay in 80p, 20p gets added to the pot.

 

For every 80p you pay in, the Government will pay in 20p (up to £2000 per year, per child).

 

That means that 20% of childcare costs will be covered by the Government topping up the amount you pay in (it gets the name “Tax-free” because the 20% is the equivalent of the tax amount most people pay).

The scheme is available for children up to the age of 12 (or 17 in the case of disabled children).

 

Tax-free childcare: who qualifies and what you need to do

To qualify parents will have to be in work, and each earning around £115 a week, and not more than £100,000 each per year.

  • You can apply for this directly and set up an online account which you can pay into to cover the cost of childcare with a registered provider.

  • Your online account will be set up through the Government website GOV.UK

  • Not only can parents pay into this scheme, but other family members can too.
  • You don’t have to do this through an employer.

  • You can do this if you are self-employed.

There is a really helpful summary about Tax-Fre childcare on the government website.

For more detailed information take a look at Tax-free childcare 10 things parents should know

As always, I am here to help you navigate through tax issues. If you need any advice on this, or on other matters, then please drop me a line.

 

 

Exclusive offer

 

I did say that it’s almost time for school to start again. If you haven’t yet bought school bags or lunch boxes I have an exclusive offer for you.

Readers of my blog can also take advantage of a 10% discount code on children’s backpacks and lunch boxes at Bag Boutique. Please email me at This email address is being protected from spambots. You need JavaScript enabled to view it. for details.

 

Read 460 times Last modified on Monday, 05 September 2016 09:01

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