News and Views

Tax-Free Childcare Scheme

At long last there is an opportunity for the self-employed and other parents who do not have an Employer Provided Childcare benefit to access a certain amount of tax-free childcare under a new scheme launched by the government in May of this year after much delay.

Essentially the scheme allows eligible parents to open a ‘Childcare Account’ online into which the government will contribute an additional 25% to any of their deposits – very similar to the way in which the ‘tax free’ element of a pension scheme works. The parent can then use these funds to pay for their childcare, so long as this is with a registered provider.

How much you as a working parent pay, and when, is entirely up to you, however there is a maximum contribution the government will make of £2000 per child per annum.

In order to qualify for Tax-Free Childcare you need to meet the following criteria:

  • be earning more than £120 per week (on average, or £6240 per annum)
    • and less than £100,000 per year
  • be paying for registered childcare for children under 12
    • or under 17 if they are registered disabled
  • not be in receipt of other childcare support
    • such as Child Tax Credit

While this is a welcome relief to parents who before now have been denied any support with childcare due to their working circumstances, the vast range of options available can seem like a bot of a minefield, and it can be difficult to determine what the best choice is for you. If you are unsure as to your options, we would suggest you have a look at the recently launched government Childcare choices website while will guide you through the various options available to you.

Or have a look at Mercia’s more in-depth article on this topic here.

As always, if you have further questions on this matter, please don’t hesitate to contact us … / 0161 0161 456 9666

Related articles

Accountants for Amazon Sellers
Limited Companies

Amazon Sellers – top tips to ensure your long term success

Have you ever considered selling on Amazon or eBay, setting up an eCommerce business, or a little side hustle?

If this sounds like you, it seems you are not alone.

More and more people these days are selling online to boost their income, sometimes just for a bit of fun and with no higher plans, and other times in the hopes of turning this so called side hustle into their dream job and their very first foray into entrepreneurship…

We have been receiving lots of enquiries recently about accounts and tax for Amazon sellers, so I’ve recorded a little video outlining our top tips if you are thinking about giving it a go yourself…

Read More »

Find out how we can help?

Lectus scelerisque a donec tincidunt litora per eleifend eget ut sagittis conubia pharetra scelerisque dui ultricies duis parturient auctor adipiscing.


Let’s start a conversation 

    Subscribe me for updates and news from In Accountancy