Are you entitled to free childcare?

The long-awaited tax-free childcare scheme launched on 28 April 2017 and will be rolled out during the course of the year.

It means that around two million households in the UK will be eligible for help with the cost of childcare.

But how do you find out if you are one of them?

How it works

The government's new Childcare Choices website is now operative, allowing parents to find out about available support.

The website includes a childcare calculator for parents to compare all the government's childcare offers and check what works best for their families.

It includes information on the tax-free childcare, universal credit and the new 30-hour free childcare offer.

This will be implemented from September 2017, providing 30 hours free childcare for working parents of three and four year olds in England - doubling the current 15 hours of free childcare currently available and saving eligible working families up to £5,000 a year.

The other options

Tax-free childcare will be available to parents of children up to the age of 11 (or 16 if disabled) who meet certain criteria.

This will be rolled out gradually but parents of children who will be under four on 31st August, and parents of disabled children, can apply now.

To access the offer you have to open an online account to pay for registered childcare. The government will then top-up the money you pay into the account.

For every £8 you pay in, the government will add an extra £2 and you can receive up to £2,000 per child, or £4,000 if disabled.

You, and any partner, must each expect to earn (on average) at least £120 per week (equal to 16 hours at the National Minimum or Living Wage) to qualify. 

If you, or your partner, are on maternity, paternity or adoption leave, or you're unable to work because you are disabled or have caring responsibilities, you could still be eligible. 

If either you, or your partner, expect to earn £100,000 or more, you can’t get Tax-Free Childcare. 

And you can’t use Tax-Free Childcare at the same time as childcare vouchers, Universal Credit or tax credits.

If eligible, you can use it to help pay:

◦       Registered childminders, nurseries and nannies

◦       Registered after-school clubs and play schemes

◦       Registered schools

Double the free childcare

From September 2017, the new 30 hours free childcare offer for working parents of three and four year olds in England will double the current 15 hours of free childcare currently available, saving eligible working families up to £5,000 a year.

Eligible parents will be able to apply online through the childcare service. They will receive a code - this will allow parents to arrange their childcare place ahead of September 2017. Parents can take their code to their provider or council, along with their National Insurance Number and child's date of birth. Their provider or council will check the code is authentic and allocate them a free childcare place.

Parents will be able to apply for tax-free childcare and the 30 hours offer in one go through the government's new digital childcare service. Eligible parents can benefit from both tax-free childcare and 30 hours free childcare at the same

Childcare vouchers

If you are a working parent who does not qualify for tax-free childcare and have a child who is not old enough to qualify for free childcare under the 30-hour scheme, there are other ways you can offset the cost of childcare.

The most common of these is a salary sacrifice scheme where the employee agrees to an amount being deducted from their salary before tax and NI is calculated. This results in the employee paying less tax and NI.

The employer then pays the deducted amount to the company that administers the childcare vouchers. This company then arranges for the vouchers to be issued to the employee or direct to the childcare provider.

The maximum amount that any employee can sacrifice is £243 per month or £55 per week.

If you would like any help on your tax matters, taking into account any childcare complications, give us a call today.