Do you have kids that are currently booked into a summer camp? Did you know that you may be able to use a tax-free childcare account to help subsidise these costs?
How it works
Once set up the government adds 25% to the amounts that you save in the account – up to £2,000 for each child – so £8,000 is topped up to £10,000 (a higher amount applies for disabled children). The account is then used to pay Ofsted registered childcare providers.
It is worthwhile noting that it doesn’t need to be the child’s parents paying into the account; uncles, aunts, grandparents and others can also make payments.
What it can pay for
It can be used to pay for childcare such as summer camps, nurseries, after school clubs, playschemes or childminders. So long as the provider has signed up for the scheme you can use the account to make the payments. It is always worth checking before you book to help get more from the account.
Eligibility criteria
Parents are not eligible if either of them expects an adjusted net income in excess of £100,000 for the current tax year. In general, the scheme can also only be used for children under 12 years old (they stop being eligible on 1 September after their 11th birthday), although different rules can apply if your child is disabled.
For further details on eligibility and how to apply you can follow this link to the GOV.UK’s website: https://www.gov.uk/tax-free-childcare
Other considerations
The government has noticed that many families who are eligible for this scheme are yet to set up their accounts, so if you are an employer you could bring this to the attention of your staff.
Rachel Roberts is a Senior Tax Accountant and would be happy to chat through any queries or concerns you have on 01242 776000 or rachel.roberts@randall-payne.co.uk.
