Tax-Free Childcare is a new Government supported scheme which gives eligible parents up to £2,000 per child, per year, towards their childcare costs. For every £8 a parent pays into their childcare account, the Government will pay in an extra £2. Parents can use the money to pay their childcare provider from their childcare account, so long as their childcare provider is signed up to Tax-Free Childcare.
Eligibility criteria include:
- The child must be under 12 years of age, or 17 if they are registered as having a disability.
- The parent must be working, either as an employee or on a self-employed basis, earning on average at least £120 per week, but less than £100,000 a year.
- Although the rules say both parents need to be in work and earning less than £100,000 a year each, it is still possible to qualify if one partner is receiving Carer’s Allowance, Employment and Support Allowance, Incapacity Benefit or Severe Disablement Benefit.
The Government has launched a new website called Childcare Choices which allows parents to apply for the scheme.
Parents with a child, or children, under the age of four on 31 August 2017 can sign up now, as can parents of disabled children under the age of 17.
Parents with older children can also register now for email alerts and they will be notified when they can formally apply. There should not be too much of a wait, as the scheme is due to cover all children by 31 December 2017.
Only one parent can open the childcare account, but both can use it, with grandparents and other family/friends able to put money in too.
Once a childcare provider – whether a breakfast club, nursery, playgroup, nanny, childminder or au pair – has registered for the Tax-Free Childcare scheme, they will appear on the Childcare Provider Checker.
If the childcare provider is on the register, payments can be made between the parent’s and provider’s accounts via BACS.
Further information is available here.