Tax Free Childcare – What’s it all about??
Plans for ‘tax free childcare’ were initially proposed back in the 2013 budget and are set to be implemented in 2017. According to the gov.uk website the scheme will be available to around 2 million households to help with the cost of childcare.
Parents will need to open an online account with can be done through the government website and can pay into the account to cover the cost of childcare with a registered provider. For every 80 pence paid in, the government will top up an extra 20 pence up to a total of £10,000 which is equivalent to £2,000 per child per year (£4,000 for disabled children). The scheme will be available for children up to the age of 12 and 17 for disabled children.
To qualify a parent must earn more than £115 per week but not more than £100,000 per year. Self-employed parents now also qualify (unlike the previous scheme which was only available for employed parents).
The scheme will be rolled out gradually with all eligible parents being able to join the scheme by the end of 2017.