Tax Free Child Care Scheme Mar 2017
From April 2017, families could benefit from the governments tax-free child care scheme. Tax-Free Childcare is a Government-backed scheme which helps parents with the cost of childcare. For every 80p you put in, the state will add 20p – so it effectively gives you basic-rate tax back on what you pay, hence the scheme’s name.
This is worth up to £2000 per child.
The average cost of full-time child care in Britain for a child under the age of two is £222.36 per week. Part-time costs equate to £116.25 per week.
There are certain requirements that will need to be met in order to qualify.
Employees who use the existing child care voucher scheme can continue to do so up until April 2018.
The new scheme will not require any input from employers, as working parents will be solely responsible for setting up and managing their own accounts.
Any existing childcare voucher schemes offered by employers will not be affected in the short term, although certain schemes may stop accepting new participants, therefore employers are urged to seek clarity from their provider of any forthcoming changes.
Further information is available on the GOV.UK website, which is also where parents will need to resister. With the current level of child care costs, this will be welcome news for families who wish to maintain or increase their working hours, and likewise for employers who could gain more flexibility with employees working patterns.
The increase in flexible working has created very different and diverse workforce in many business. If you would like to discuss this or any other issues further, please contact your local HR Advisor.