Tax-free childcare

With Allchurch & Co

Given that Allchurch and Co owners, Carly and Ellie are both expanding their families this year, it seemed a good time to share some information on the changes to the Government Scheme and how they are helping working parents with the cost of childcare.

CHANGES TO CHILDCARE VOUCHERS

From 6th April 2018, child-care voucher schemes will close to new applicants, however if you have joined a scheme and get your first vouch-er by 5 April 2018 you can keep getting your vouchers, as long as:

  • you stay with the same employer and they continue
  • to run the scheme
  • you don’t take an unpaid
  • career break of longer than a year

To replace the childcare vouchers scheme, the Government have introduced a new ‘Tax-free Childcare’ scheme

Tax-Free Childcare aims to help with the cost of childcare, enabling more parents to go out to work, if they want to and to provide great-er security for their families

Below we have summarised the key points to know about Tax free Childcare

  • You’ll be able to open an online account, which you can pay into to cover the cost of childcare with a registered provider. This will be done through the government website.
  • For every 80p you (or someone else pays in), the government will top up an extra 20p. This equates to 20%, which is the basic rate of tax, hence this is where the name ‘Tax free’ came from.
  • The Government will top up the account with their 20% of childcare costs to a max-imum of £10,000. This equates to £2,000 support per child per year (Or £4,000 for disabled children). The scheme will be available for all children up until the age of 12, and for children with disabilities it will be available up until the age of 17.
  • In order to qualify, parents need to be in work and each earning at least £120 a week, and no more than £100,000 each per year. Unlike the current childcare vouchers scheme, the Tax free Childcare does not require employers to operate the scheme.

It also enables self-employed parents to use the scheme.

  • The scheme is flexible in terms of the amount you pay in can vary each month. For example you may want to build up the account over the summer holidays where the need for childcare may be greater. It’s also not just the parents who can pay into the account – if grandparents, other family members or employers want to pay in, then they can. If you start using the scheme, but then change your mind and don’t wish to use the scheme, you can withdraw the money, but the government will withdraw their contribution also.
  • The mechanics of the scheme is designed to be simple to use. You will re-confirm your circumstances every 3 months using an easy online process. There will be a simple log-in service where parents can view accounts for all of their children at once.

Allchurch & Co look forward to supporting Local Businesses’ throughout 2018, and as always if any of this article is of interest to you and you want to find out more, please do not hesitate to get in touch.

www.allchurchco.com

07825 232218

 

 

 

 

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