You are here: Home - Household Bills - How to - News -

How the government is trying to cut your summer holiday childcare bill

0
Written by:
26/06/2018
Working parents worried about childcare during the school holidays are being reminded they can use the government’s Tax-Free Childcare scheme as well as the ‘30 hours free’ initiative to pay for clubs and camps.

Almost a third of parents in the UK feel stressed trying to arrange childcare for the school holidays, according to a YouGov poll on behalf of HMRC.

A further third of British parents worry about balancing their job and school holiday childcare and more than half – 54% – admit they look forward to their kids returning to school in September.

But parents can use Tax-Free Childcare (the new initiative, replacing the old Childcare Vouchers scheme), which could leave them with an extra £2,000 per child each year.

More than 58,000 registered childcare providers including schools, football, art and tennis clubs, have signed up to accept Tax-Free Childcare payments, HMRC said.

Parents who pay into their account regularly can ‘save up’ their Tax-Free Childcare allowance and use it for childcare during school holidays.

Parents can apply for Tax-Free Childcare and 30 hours free childcare at the same time (both schemes can be used together), and both are available to self-employed parents.

Chief Secretary to the Treasury, Liz Truss, said: “Organising childcare for school holidays is important for parents. Tax-Free Childcare and 30 hours free childcare help make things easier by cuttings thousands of pounds from the childcare bills of working parents.”

How Tax-free Childcare works

  • The government gives eligible families an extra 20% towards the cost of childcare. So, if you pay £8 into your account, the government will give you an extra £2.
  • You can put up to £10,000 into your account a year, which means your top-up could be as much as £2,000 per child per year (or £4,000 for disabled children).
  • The top-up is added instantly, and you can then send electronic payments directly to your childcare provider.
  • The maximum government top-up is £500 per quarter, or £1,000 if the child is disabled.
  • All registered childcare providers – nannies, nurseries, childminders, clubs – can sign up to receive parents’ payments through Tax-Free Childcare.
  • You need to sign back into your account every three months and confirm your details are up-to-date to keep getting the government top-ups.

Are you eligible?

You can apply for Tax-Free Childcare if:

  • You’re a working parent (including self-employed)
  • You have children under 12 (under 17 for disabled children)
  • You, and any partner, both earn at least £125 per week
  • You, and your partner, earn less than £100,000. If one or both of you earns more than £100,000, neither of you is eligible.

How 30 hours free childcare works

  • Eligible families get 30 hours a week of free childcare for 38 weeks of the year. That’s a total of 1,140 hours per year.
  • The hours can be used flexibly with one or more childcare provider.
  • It is a further 15 hours on top of the universal 15 hours free childcare entitlement.
  • You can take up a 30 hours place the term after your child turns three and the date you receive a 30 hours code – whichever is later. Term start dates are 1st September, 1st January and 1st April.
  • You have to apply in good time to get your code. You can apply up to 16 weeks before your child turns three.
  • If you already get 30 hours free, you need to reconfirm you are eligible every three months.

Are you eligible?

You can apply for 30 hours free childcare if:

  • You have a three or four-year-old child
  • You, and your partner, earn the equivalent of working 16 hours a week at your national minimum wage (£125 at the National Living Wage). If you’re on maternity, paternity or adoption leave, you may still be eligible.
  • You, and your partner, earn less than £100,000. If one or both of you earns more than £100,000, neither of you is eligible.

To apply for either scheme, click here: https://childcare-support.tax.service.gov.uk/par/app/trialmessage

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

Five ways to get on the property ladder without the Bank of Mum and Dad

A report suggests the Bank of Mum and Dad is running low on funds. Fortunately, there are other options for st...

The essential Your Money guide to the April 2018 tax changes

As we head into the 2018/19 tax year, a number of key changes take place to existing policies while some new i...

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

YourMoney.com Awards 2018

Now in their 21st year, our awards recognise the companies offering the best products and services to consumers

Money Tips of the Week

Read previous post:
mortgage lending front doors
Revealed: the cities where houses sell like hot cakes

Whether you’re buying your forever home or an investment for the future, buying and selling property can be a long...

Close