Parents across the UK are now able to pre-register their interest in the government's new childcare offers that were announced by Chancellor Philip Hammond in the 2017 Budget. This includes the new Tax-Free Childcare Scheme, which offers up to £2,000 towards childcare costs for each child up to the age of 12, along with the 30 hours free childcare scheme for working parents of three and four-year-olds in England that launches later this year.
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To register, parents are advised to complete the relevant form on the government's Childcare Choices website (childcarechoices.gov.uk), to find out whether they are eligible to receive the benefits and receive an email notification when the scheme officially launches.
What is Tax-Free Childcare?
© Photo: iStockTax-Free Childcare is confirmed to start in April, meaning that up to £2,000 will be put towards childcare costs for each child up to the age of 12. For each 80p you pay in childcare, the government will add another 20p – up to £10,000 of spending. The scheme is available for children up to the age of 12, and the tax relief is doubled for children with disabilities. It will initially focus on parents with children aged two and under, before being rolled out nationally by the end of the year.
Who is eligible?
The scheme is ideal for those who work for companies that don't offer childcare vouchers, and for the self-employed. To qualify, parents will have to be employed, both adults must be earning at least £115 per week and not more than £100,000 per year, and live in England. Although both parents must be working to be eligible for the scheme, those who are temporarily absent from work such as on maternity, paternity or adoption leave are still eligible.
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Parents who already receive Employer-Supported Childcare are not available to receive the new Tax-Free Childcare funding. Employer-Supported Childcare will be closing to new entrants from April 2018, however parents who are already members of the scheme will be able to remain in it as long as their employer offers it.
How does it work?
© Photo: iStockParents must express their interest in the scheme by registering on the Childcare Choices website. Your application will be reviewed and if successful you'll be able to open an online account, provided by NS&I. You will then be able to pay into this account to cover the cost of childcare, with your payments topped up by the government.
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For every £8 you pay in, the government will make a top-up payment of an additional £2, up to a maximum of £2,000 per child per year – or £4,000 for disabled children. The top-up is paid instantly and parents can then use this money to pay their childcare providers.
Free Childcare Entitlement:
From September, working parents in England with three and four year olds will also be able to apply to have their free childcare entitlement doubled to 30 hours a week. This is said to be worth around £5,000 a year to a young family with a three year old and both parents in work.
Eligible parents will be able to benefit from both tax-free childcare and free childcare at the same time. Simply apply online through the Childcare Choices website and you will receive a code that allows you to arrange a childcare place ahead of the scheme's launch in September 2017. Take your code, along with your child's national insurance number and date of birth to your childcare provider or council, who will verify that it is authentic and allocate them a free childcare place.
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