The Government is offering up to £2,000 per year per child towards tax free childcare costs including nurseries, childminders and other wraparound care. While 1.3 million families are eligible for the Tax-Free Childcare scheme, over 800,000 are not using it ...
So, how does it work? Well, for every 80p you put into your Tax-Free Childcare account, the Government adds 20p. So, that's your basic rate of tax back on anything you put in your account. There is a £500 quarterly cap to the government top-up!
Any worker can get Tax-Free Childcare, including the self-employed. If you're single, you qualify for it on your own as long as you're in work. If you're in a relationship, you usually both have to be in work to qualify.
There are some circumstances where you're eligible, even if you are not working:
- You're on sick leave
- You're on annual leave
- You're on shared parental, maternity, paternity or adoption leave, and already have a Tax-Free Childcare account for another child
- You or your partner is in work and the other isn't able to work and receives certain benefits such as incapacity benefit, carer's allowance or severe disability allowance
- Your child must be 11 or younger (or 16 if your child has a disability)
The scheme's available to parents of children until the September after their children turn 11 (or until they turn 16 if your child is disabled) and you need to earn at least national minimum wage, but less than £100,000 a year.
You can use it for all sorts of childcare, including breakfast and after-school clubs although the provider must be registered with both the scheme and a regulator.
Government top-ups normally appear on the same day.
If you'd like to find out more about anything I've written here, do call me on 01908 774323 or leave a comment below and let's see how I can help you.