Tax-Free Childcare

Tax-Free Childcare will eventually replace Employer Supported Childcare and has the advantage that the self employed, as well as employed individuals, can make use of the scheme. At Rostance Edwards, we can provide guidance on Tax-Free Childcare and Employer Supported Childcare in the Cannock area.

The government has introduced a tax incentive for childcare Tax-Free Childcare (TFC).

Overview

Under TFC the tax relief available is 20% of the costs of childcare up to a total of childcare costs of £10,000 per child per year. The scheme will therefore be worth a maximum of £2,000 per child (£4,000 for a disabled child). Parents are able to apply for TFC for children under 12 (up to 17 for children with disabilities).

To qualify for Tax-Free Childcare all parents in the household must generally meet a minimum income level, based on working 16 hours a week (on average £120 a week) and each earn less than £100,000 a year and not already be receiving support through Tax Credits or Universal Credit.

Online account

Parents are able to register with the government and open an online account. The government will then 'top up' payments into this account at a rate of 20p for every 80p that families pay in.

Self-employed

Self-employed parents are able to get support with childcare costs using the TFC scheme, unlike employer supported childcare scheme. To support newly self-employed parents, the government have introduced a 'start-up' period. During this period a newly self-employed parent will not have to earn the minimum income level.

TFC and service issues

All parents of eligible children can apply for both 30 hours free childcare and TFC via a single website. Parents can apply online through the childcare service which can be accessed via the Childcare Choices website.

HMRC acknowledges that some parents did not receive the intended level of service when using the website and that they have subsequently made significant improvements. For those parents who have had difficulties in accessing the service, compensation may be available: see childcare service compensation.

Childcare providers

Only childcare providers registered with a regulator can receive Tax-Free Childcare payments.

How does this relate to employer supported childcare?

Employer Supported Childcare (ESC) closed to new entrants in October 2018. ESC continues to be available for current members if they wish to remain in it or they can switch to TFC but parents cannot be in both ESC and TFC at the same time.

How we can help

If you are in the Cannock area please do contact us for guidance on Tax-Free Childcare.

Home | Contact us | Site map | Accessibility | Disclaimer | Standard Terms of Business | Help |

© 2019 Rostance Edwards Group. All rights reserved. | Company Number: 03655701

Rostance Edwards Group, 1 & 2 Heritage Park, Hayes Way, Cannock, Staffordshire WS11 7LT
We use cookies on this website, you can find more information about cookies here.

In accordance with the disclosure requirements of the Services Regulations 2009, our professional indemnity insurer is HCC International Insurance Company Pk, of Walsingham House, 35 Seething Lane, London, EC3N 4AH. The territorial coverage is worldwide excluding professional business carried out from an office in the United States of America or Canada and excludes any action for a claim brought in any court in the United States of Amercia or Canada.

We are registered to carry on audit work in the UK by the Institute of Chartered Accountants in England and Wales and details about our audit registration can be viewed at www.auditregister.org.uk, under reference number C008875364.