The Government’s long-awaited Tax Free Childcare scheme, intended to eventually replace Childcare Vouchers, is now in operation.
So, we thought we’d bring you some information on how it works.
How Does The Scheme Work?
Essentially the Government adds 20p for every 80p you spend on childcare, effectively returning basic-rate tax to you. So say your bill for childcare is £500 in any given month. You’d pay £400, and the Government would pay the remaining £100. The Tax Free Childcare scheme remains in effect up to a total cost of £10,000 per child per year, meaning that in total you could receive up to £2,000 per child per year.
Am I Eligible for the Scheme?
All workers are eligible for the scheme, including the self-employed, so long as they are earning at least £120 per week, and not more than £100,000 per year. The scheme doesn’t rely on being purchased through employers, which made things tricky for self-employed workers in the past. This marks a change from the previous Childcare Voucher scheme.
Should I Go On the New Scheme?
Each individual’s situation is liable to be different when it comes to which option is best, going with the new scheme or sticking with the old. We’d recommend our clients have a chat with us about which option will give them the best savings before committing either way. As Chartered Accountants, we have all the necessary expertise to advise you on how best to organise your financial affairs.
To find out more, why not get in touch with us today? One of our expert staff will be more than happy to help you with your requirements. You can call us on 01704 211 434 or fill in our online contact form, and we’ll get back to you!