Tax-free childcare scheme open to all parents of under-12s
HMRC has issued a reminder that from 14 February, all working parents with children under 12 can apply for up to £2,000 of childcare support per child, per year
14 Feb 2018
Parents, including the self-employed, can apply online for tax-free childcare by visiting the childcare choices website, which also provides a calculator to help parents to choose which government childcare support is best for them.
For every £8 that families pay in to their online childcare account, the government will make a top-up payment of an additional £2, up to a maximum of £2,000 per child per year (or £4,000 for disabled children).
This top up is added instantly and parents can then send electronic payments directly to their childcare providers. The maximum government top-up is £500 per quarter for each child.
All registered childcare providers – whether nannies, nurseries, childminders or after school clubs – can sign up online now to receive parents’ payments through tax-free childcare.
Parents need to sign back in every three months and confirm their details are up to date, to keep getting government top-ups.
The tax-free childcare scheme is replacing employer-supported childcare, including ‘childcare vouchers’, which is only available to parents if their employer offers it. Employer-supported childcare will be closing to new entrants from April 2018, but parents who are already a member of the scheme will be able to remain in it as long as their employer continues to offer it.
The tax and National Insurance exemption for workplace nurseries will remain in place.
More than 190,000 parents currently have a tax-free childcare account, and HMRC says it expects the scheme to be supporting around a million families with their childcare costs by the end of the Parliament.
Liz Truss, chief secretary to the Treasury, said: ‘Tax-Free Childcare will cut thousands of pounds from childcare bills and is good news for working parents.
‘More parents will be able to work if they want to and this demonstrates our commitment to helping families with the cost of living.’
Report by Pat Sweet