Tax-Free Childcare will begin on 28 April 2017

The introduction of the government’s Tax-Free Childcare scheme will begin on 28 April 2017, for parents of the youngest children.  A statement from HMRC today (22 March 2017) says the scheme will be gradually rolled out over 2017. It will allow eligible working families to claim 20% of their childcare costs, up to £2,000 per child per year, or £4,000 for a child with a disability, from the Government.

To prepare parents, the Government has launched a new Childcare Choices website.

The website includes a Childcare Calculator for parents to compare all the government’s childcare offers and check what works best for their families. Through the site parents can also pre-register for email alerts that will notify them when they can apply.

Remember, if you are a parent in Northern Ireland, the 15 and 30 hours free childcare provisions do not apply to you.

How does Tax-Free Childcare work?

Working parents will be able to apply, through the childcare service, to open an online childcare account. For every £8 that is paid 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 Government has said that this top up will be added instantly and parents can then send electronic payments directly to their childcare providers.

How do parents know if Tax-Free Childcare is right for them?

It is important to remember that not all working parents will be better off using Tax-Free Childcare. In many cases, working parents will be better off using Childcare Vouchers or accessing Tax Credits. Employers For Childcare has produced a guide, Big Changes, Big Choices, to help you understand what support will be best for you.

You can also compare your potential Childcare Savings using the Employers For Childcare calculator now.

However, working out what is best for your family can be complicated. Employers For Childcare’s Family Benefits Advice Service was specifically set up to ensure families are claiming the best support available to them, particularly with the cost of childcare.

Our Advisors can provide personalised advice and information on Tax-Free Childcare and calculate which form of financial support is best for your circumstances. Call us 028 9267 8200. 

How do childcare providers register to receive payments?

All registered childcare providers – whether childminders, nurseries or after school clubs – can sign up online now to receive parents’ payments through Tax-Free Childcare. Once childcare providers have signed up they will appear on the Childcare Provider Checker. This allows parents to check whether childcare providers have already signed up for Tax-Free Childcare.

We would encourage all childcare providers to ensure that they have registered to receive payments. If you have not already done so visit Tax-Free Childcare for Childcare Providers for more information.