Tax-Free Childcare, the new government scheme to help
working parents with the cost of childcare launched at the end of April and is
being rolled out to parents, starting with those parents with the youngest children
first.
For every £8 a parent pays in, the government will pay in
an extra £2. Parents can receive up to £2,000 per child, per year, towards
their childcare costs making a total amount of £10,000. Higher limits of £4,000
and £20,000 apply for disabled children.
To qualify for Tax-Free Childcare parents and partners in
the household must generally meet a minimum income level of on average £120 a
week and each earn less than £100,000 a year.
The scheme will be available for children up to the age of
12, or 17 for children with disabilities. All eligible parents will be able to
join the scheme by the end of 2017. Those eligible will be able to apply for
all their children at the same time although the government rollout will start
with the youngest children first. Parents will need to open an online account,
which they can use to pay for childcare from a registered provider.
For those employers who currently offer Employer
Supported Childcare, usually in the form of childcare vouchers, these schemes can
remain open to new entrants until April 2018. Existing members have the option
to remain in their existing scheme or change over to Tax-Free childcare as
their child becomes eligible. It is not possible to benefit from tax-free
childcare and employer supported childcare at the same time.
A calculator for parents comparing the options and
guidance on the other government provided free childcare available are
available on GOV.UK.
For more
information please do not hesitate to contact the team at Ward Williams
Financial Services Ltd on 01932 830664 or by email on wwfs@wardwilliams.co.uk.
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