Launching of Tax-Free childcare
We previously reported on the expected launch of the Government’s tax-free childcare scheme in early 2017 and we confirm this will now be launched on 28 April 2017 and it will be gradually rolled out through the year.
As a reminder, the tax-free childcare scheme is available to work parents (each earning at least £115 per week but less than £100k per annum) who will be able to receive up to £2,000 per year, per child, towards their childcare costs (£4,000 for disabled children). The scheme applies to children up to the age of 12, or the age of 17 for children with disabilities.
How does the scheme work?
Parents will need to register with the Childcare Choices website, which launched on 22 March 2017 and can pre-register before the launch date.
Once an account is opened, parents need to pay in their money for the childcare and the government will then top the account up. For every £8 paid into the scheme by the parent, the government will contribute an extra £2. Parents may then use the money in the account to pay a registered childcare provider
Parents can remain under any existing Employer Supported Childcare scheme, usually in the form of childcare vouchers, if they wish and these schemes may remain open to new entrants until April 2018. The tax exemption for workplace nurseries will also be unaffected.\
30 hours free childcare
An additional scheme will be launched in September 2017.
The free childcare scheme is available to work parents of three or four-year-old children. Parents will again need to apply for the scheme using the Childcare Choices website. Although this scheme is not available until later in the year, you are able to pre-register now.
Currently, parents are entitled to 15 hours of free childcare but under the new scheme, the free childcare time will be doubled.
To check whether you are eligible for the scheme, more information can be found here: https://www.gov.uk/government/publications/30-hours-free-childcare-eligibility