Tax Free Childcare
You’ll be able to open an online account, which you can pay into to cover the cost of childcare with us as a registered provider. This will be done through the government website, GOV.UK.
For every 80p you or someone else pays in, the government will top up an extra 20p.This is equivalent of the tax most people pay - 20% - which gives the scheme its name, ‘tax-free’. The government will top up the account with 20% of childcare costs up to a total of £10,000 - the equivalent of up to £2,000 support per child per year (or £4,000 for disabled children).
To qualify, parents will have to be in work, and each earning at least £120 a week and not more than £100,000 each per year. The scheme is designed to be flexible for parents if, for example, they want to get back to work after the birth of a child or work part-time.
Any eligible working family can use the Tax-Free Childcare scheme - it doesn’t rely on employers offering it.Tax-Free Childcare doesn’t rely on employers offering the scheme, unlike the current scheme Employer-Supported Childcare. Any working family can use Tax-Free Childcare, provided they meet the eligibility requirements.
Self-employed parents will be able to get support with childcare costs in Tax-Free Childcare, unlike the current scheme (Employer-Supported Childcare) which is not available to self-employed parents. To support newly self-employed parents, the government is introducing a ‘start-up’ period. During this, self-employed parents won’t have to earn the minimum income level.
The scheme will be available to parents on paid sick leave and paid and unpaid statutory maternity, paternity and adoption leave.
You do not have to switch to Tax-Free Childcare if you do not wish to. Employer-Supported Childcare will continue to run. The current scheme will remain open to new entrants until April 2018. Parents already registered by this date will be able to continue using it for as long as their employer offers it.