New Tax-Free Childcare scheme delayed until 2017
Written on 6 July 2015
The government’s new Tax-Free Childcare scheme, which was due to be launched this autumn, will now be delayed until 2017 as a result of a legal challenge says the government. The existing Employer-Supported Childcare scheme, which includes Childcare Vouchers, will still be available until the Tax-Free Childcare scheme, is introduced.
The new scheme will be available to up to 1.8 million households to help with the cost of childcare.
Tax-Free Childcare – what you need to know
Here are 10 things HM Treasury* says parents need to know about the new Tax-Free Childcare scheme.
1. You’ll be able to open an online account, which you can pay into to cover the cost of childcare with a registered provider.
2. For every 80p you pay in, the government will top this up by an extra 20p up to a limit of £2,000 government support per child per year (or £4,000 for disabled children).
3. The scheme will be available for children up to the age of 12 or 17 for children with disabilities.
4. To qualify, parents will have to be in work, earning just over an average of £50 a week and not more than £150,000 per year.
5. Any eligible working family can use the Tax-Free Childcare scheme - it doesn’t rely on employers offering it.
6. The scheme will also be available for parents who are self-employed (unlike the current scheme), on paid sick leave, and on statutory maternity, paternity and adoption leave.
7. If you currently receive Employer-Supported Childcare then you can continue to do so. You do not have to switch to Tax-Free Childcare if you do not wish to.
8. Parents and others can pay money into their childcare account as and when they like making the scheme more flexible.
9. The process will be made as simple as possible for parents. For example, parents won’t have to report any change of circumstances to HMRC and there will be a single log-in service where parents can view accounts for all of their children.
10. You’ll be able to withdraw money from the account if you want to.
Other useful information
You can find out more about what help is available for paying for childcare in our guide.
And if you’re on a tight budget or looking for ways to make your money go further, see our guide on better household budgeting for ideas.