You are here: Home - Household Bills - News -

Parents can now pre-register for tax-free childcare scheme

0
Written by: Paloma Kubiak
22/03/2017
Millions of parents can pre-register from today for the government’s Tax-Free Childcare scheme which will officially launch at the end of April.

The Tax-Free Childcare scheme will be available to around two million households, helping families to receive £2,000 a year towards the cost of childcare for each child under the age of 12 (or under 17 for disabled children).

It officially launches on 28 April but parents can pre-register on the government’s Childcare Choices site to receive an email with details of how to apply.

The flagship scheme will be gradually rolled out over 2017 with parents of the youngest children (under two) able to apply first.

From September 2017, working parents with three and four-year-olds in England will see their free childcare entitlement double to 30 hours a week, in total worth up to £5,000 for each child.

Education secretary, Justine Greening, said: “Affordable childcare and early years education are a vital part of how we can get our children on the right path, while also helping parents to be back at work, if that is what they want. Many parents are struggling to balance the cost of childcare against the benefits of being in work and this government wants to help.”

How the new Tax-Free Childcare policy works

Parents will be able to open an online account on the gov.uk website, which they can pay into to cover the cost of childcare with a registered provider.

For every 80p they or someone else pays in, the government will top up an extra 20p up to a maximum of £10,000 a year. So, that could mean the equivalent of up to £2,000 worth of support per child per year (or £4,000 for a disabled child).

The scheme is available to all working parents, including the self-employed.

To be eligible, parents have to be in full or part-time work, with each earning on average at least £120 a week (equal to 16 hours at the National Minimum or Living Wage) and not more than £100,000 each a year. They can have a combined income of over £100,000.

Parents and anyone else (for example grandparents or employers) can pay money into their childcare account when they like – they can pay in more in some months than others.

Childcare vouchers

The new Tax-Free Childcare policy is different to the current childcare voucher scheme, which closes to new entrants in April 2018. Parents registered by this date will be able to continue using the childcare voucher scheme for as long as their employer offers it and will not have to switch to the new system, unless they want to.

Unlike the current childcare voucher scheme, the Tax-Free Childcare system does not rely on employers offering the scheme to parents so this is good news for those who work for companies that don’t offer childcare vouchers or are self-employed.

HM Revenue & Customs (HMRC) confirms you cannot use the Tax-Free Childcare scheme at the same time as childcare vouchers, Universal Credit or tax credits. But you can use it with the alternative 15 hours and 30 hours schemes (see the Childcare Choices site for more on these).

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

Which ISA is right for you? A round up of the six products available in 2017

From cash to innovative finance to lifetime, here's our guide to the ISA products available to savers this yea...

Guide to buy-to-let tax changes

In late 2015, former Chancellor George Osborne announced a range of  tax measures aimed at landlords, which t...

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.

Five fund tips for a 0.25% interest rate environment

With interest rates stuck at a record low 0.25% and expectations rates could fall to close to zero, here are ...

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...

Investing your money

Alliance Trust Plc gives you smart insight into how to invest your money

Money Tips of the Week

Read previous post:
2251963-female-driver
Auto-renewal trap: save up to £275 switching car insurance

More than eight million motorists will overpay their car insurance to the tune of £2bn in the next year by...

Close