If you\u2019re a working parent or legal guardian, it\u2019s important that you know about the tax-free childcare scheme delivered by the government. This gives you 20% off your childcare costs, with the government adding 20p to every 80p you pay into your account.<\/p>\n
The scheme can be used for childminders, nurseries, nannies, afterschool clubs and play schemes, making it much easier to fulfil your weekly hours without having to worry about the welfare of your child whilst you\u2019re at work.<\/p>\n
<\/p>\n
Under the tax-free childcare scheme, you can claim up to \u00a3500 every three months, up to a maximum of \u00a32,000 a year. This applies to each of your children, so if you have two kids you can times that by two, and so on.<\/p>\n
If your child is disabled, the amount you can claim increases to \u00a31,000 every three months and is capped at \u00a34,000 a year.<\/p>\n
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First of all, your child has to be aged 11 or under and live with you, with their eligibility expiring on the 1st<\/sup> of September following their 11th<\/sup> birthday. Whilst adopted children are eligible too, this scheme unfortunately doesn\u2019t apply to foster children.<\/p>\n You then need to check that you\u2019re eligible and apply<\/a>. Once this is done, the government will add \u00a32 on top of every \u00a38 you pay into your account.<\/p>\n <\/p>\n Yes, you\u2019ll need to expect to earn an average of at least the National Minimum Wage or Living Wage for 16 hours a week, as will your partner if you have one.<\/p>\n <\/p>\n We understand that 2020 has been a difficult year for everyone, so if you don\u2019t expect to make enough profit in the next three months, you can use an average of how much you expect to make over the current tax year.<\/p>\n <\/p>\n If you or your partner expect to earn a net income of over \u00a3100,000 in this tax year, you won\u2019t be eligible for the scheme. Although, if this is the case and it\u2019s due to you being a critical worker that earned more through overtime due to COVID-19, you can still apply.<\/p>\n You\u2019re also exempt from the scheme if you or your partner receive a childcare bursary or grant or expect to do so within the next three months. The same applies if you\u2019re claiming Working Tax Credit, Child Tax Credit, Universal Credit or childcare vouchers.<\/p>\n However, if you\u2019re receiving childcare vouchers from your employer, you can forfeit them in favour of tax-free childcare. Simply tell your employer within 90 days of applying for the scheme, and send a confirmation letter or subsequent copies of your payslips to HMRC as proof that you\u2019re not claiming both.<\/p>\n <\/p>\n The scheme is designed to support parents who require childcare whilst they\u2019re at work. That being said, if you\u2019re not working but your partner is, you may still be able to claim tax-free childcare if you receive Incapacity Benefit, Severe Disablement Allowance, Carer\u2019s Allowance or contribution-based Employment and Support Allowance.<\/p>\n Another common scenario is when you\u2019re waiting to return to work or start a new job within the next 31 days. In this case, you can apply right now rather than waiting until you\u2019re in the workplace.<\/p>\n <\/p>\n Your childcare provider needs to be signed up to the scheme too, so make sure to check with them first. If they\u2019re not, it might be worth asking if they\u2019d consider joining.<\/p>\n <\/p>\n We appreciate that there\u2019s a lot to take in and it can sometimes require a bit of admin before you find out whether you\u2019re definitely eligible. If you\u2019d like to save time and stress, we can offer additional advice and even manage your application for you. To find out more, give us a call on 01482 235575, fill in our contact form <\/a>or connect with Aaron on LinkedIn<\/a>.<\/p>\n <\/p>\n Published by Aaron Gilmore<\/p>\n","protected":false},"excerpt":{"rendered":" If you\u2019re a working parent or legal guardian, it\u2019s important that you know about the tax-free childcare scheme delivered by the government. This gives you 20% off your childcare","protected":false},"author":12312793,"featured_media":6625,"template":"","know_how_category":[],"class_list":["post-6626","know-how","type-know-how","status-publish","has-post-thumbnail","hentry"],"acf":[],"_links":{"self":[{"href":"https:\/\/thebusinessculture.co.uk\/hey\/wp-json\/wp\/v2\/know-how\/6626","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/thebusinessculture.co.uk\/hey\/wp-json\/wp\/v2\/know-how"}],"about":[{"href":"https:\/\/thebusinessculture.co.uk\/hey\/wp-json\/wp\/v2\/types\/know-how"}],"author":[{"embeddable":true,"href":"https:\/\/thebusinessculture.co.uk\/hey\/wp-json\/wp\/v2\/users\/12312793"}],"version-history":[{"count":4,"href":"https:\/\/thebusinessculture.co.uk\/hey\/wp-json\/wp\/v2\/know-how\/6626\/revisions"}],"predecessor-version":[{"id":6635,"href":"https:\/\/thebusinessculture.co.uk\/hey\/wp-json\/wp\/v2\/know-how\/6626\/revisions\/6635"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/thebusinessculture.co.uk\/hey\/wp-json\/wp\/v2\/media\/6625"}],"wp:attachment":[{"href":"https:\/\/thebusinessculture.co.uk\/hey\/wp-json\/wp\/v2\/media?parent=6626"}],"wp:term":[{"taxonomy":"know_how_category","embeddable":true,"href":"https:\/\/thebusinessculture.co.uk\/hey\/wp-json\/wp\/v2\/know_how_category?post=6626"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Do I need a certain level of income?<\/strong><\/h2>\n
What if I\u2019m self-employed?<\/strong><\/h2>\n
Exemptions<\/strong><\/h2>\n
What if I\u2019m not working?<\/strong><\/h2>\n
Can it be used anywhere?<\/strong><\/h2>\n
We\u2019re here to help<\/strong><\/h2>\n