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Are you claiming your tax-free childcare?

Childcare costs for working parents are rising faster than wages. The average cost of childcare in England is £236 a week, which can easily absorb most of a month’s earnings. Thousands of parents are eligible to get a fifth off childcare costs, however they are not yet claiming help from the Government. The current scheme is referred to as ‘tax-free childcare’; for every £80 the parent spends on childcare, the Government will top this up by a further £20. This is, however, up to £500 per child in a three month period. This equates to £2,000 a year available.

“I am a working parent with children, am I eligible for tax-free childcare?”

You are deemed eligible for tax free childcare if you (and, if you have one, your partner) are:

· In work; and

· Both working a minimum of 16 hours a week and earning at least the national living wage.

Your child must be under 12 and living with you. If your child has a disability, you could get up to £4,000 a year until they are 17.

Your child must be under 12 and living with you. If your child has a disability, you could get up to £4,000 a year until they are 17.

You are not eligible if you or your partner have taxable earnings over £100,000

The childcare must be via a registered care provider, and the provider and the parent must both register for the scheme via the website.

How can I register for tax-free childcare?

Visit the website to check if you qualify. It is vital to confirm your details on the website every three months to prevent being removed from the scheme. It is also important to check if you’ll be better off using this scheme as tax credits will stop immediately if you claim tax-free childcare. When you have applied successfully, you can then sign in via the website to pay your childcare provider. The ‘tax-free childcare’ scheme does not involve an employer and can therefore be claimed by both employed and self-employed individuals.

If you already receive childcare vouchers through the old scheme, check carefully before switching to ‘tax-free childcare’ as you may be better off as you are.

For more information, speak to one of our tax team

This summary is published for the information of clients. It provides only an overview of the main points, and no action should be taken without consulting the detailed legislation or seeking professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material contained in this summary can be accepted by the authors or the firm.


Brayne, Williams & Barnard Limited

Rosemount House, Rosemount Avenue, West Byfleet, Surrey, KT14 6LB

tel 01932 350117

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