The government’s Tax-Free Childcare account can be used to pay for approved childcare for children aged 11 or under, or 16 if the child has a disability.
As we are now into the school summer break, it is useful for working parents to know that the account can include paying for a summer holiday club!
In fact, approved childcare includes paying childminders, nursery fees and nannies, as well as breakfast or after school clubs, and play schemes. After school activities don’t have to be based at the school or nursery setting.
Your childcare provider must be signed up to the scheme before you can pay them and benefit from Tax-Free Childcare, so you are best to check with your provider to see if they’re signed up.
Opening an account
Opening a Tax-Free Childcare account is quick and easy and can be done at any time of the year. Families who have not yet signed up should check their eligibility and apply online using Gov.uk: https://www.gov.uk/tax-free-childcare
For every £8 paid into an online account they will receive an additional £2 from the government. This means parents and carers can receive up to £500 every 3 months (£2,000 a year for each child), or £1,000 (£4,000 a year for each child) if their child is disabled.
Money can be deposited at any time to be used straight away, or whenever it is needed. Unused money in the account can be withdrawn at any time but without the top up, just the money you have deposited.
Eligibility
Families could be eligible for Tax-Free Childcare if they:
- have a child or children aged 11 or under. They stop being eligible on 1 September after their child’s 11th birthday. If their child has a disability, they can receive support until 1 September after their child’s 16th birthday;
- earn, or expect to earn, at least the National Minimum Wage or Living Wage for 16 hours a week, on average;
- each earn no more than £100,000 per annum; and
- do not receive tax credits, Universal Credit or childcare vouchers.
It takes 20 minutes to apply online: https://www.gov.uk/apply-for-tax-free-childcare
If you have any questions for Rachel or the team, do get in touch on 01242 776000 or tax@randall-payne.co.uk.
