Tax free child care

Tax free child care

You may remember back in 2013 the government announcing a new tax break for working parents. Hopefully it will soon be available. It is very soon to happen and below is a summary of the main terms and conditions:

1. Tax free child care is an online account like a Bank account which you can pay money into. The account can only be opened by parents with children aged up to 12 or 17 if they have disabilities.

2. The parents must be working and earn at least £115 a week but not more than £100K each year. Anyone can pay into it not just the parents, i.e. grandparents.
For each 80p paid in the government will add 20p.

3. The money must be used to pay for child care with a carer who is registered to receive a tax free child care payment.

4. To qualify you must not be receiving free or subsidised child care or child care vouchers from your employer.

5. If you close the account and draw out the money you lose the governments contribution.

This scheme is likely to start in the Spring 2017 and is being introduced gradually with the youngest children first.
You can register with the portal to receive an email alerting you to when you become entitled to start the account.