New Government Childcare Schemes
Working parents can start applying for two new Government childcare schemes launching this year – Tax-Free Childcare which begins immediately and 30 hours free childcare which starts in September.
This means that working parents of children, aged under 4 on 31 August 2017, can now apply through the new digital childcare service for Tax-Free Childcare and receive a Government top-up of £2 for every £8 that they pay into their Tax-Free Childcare account. This will apply to children under 12 years old but parents of disabled children under 17 will also be able to apply for Tax-Free Childcare.
This new scheme is designed for working families, including the self-employed, in the UK. For every £8 you pay in, the government will add an extra £2, up to £2,000 per child, or £4,000 per year for disabled children under 17 years old. The special account is then used to pay for childcare with an OFSTED registered nursery or childminder.
Employer-Supported Childcare Tax-Free Childcare will eventually replace the existing ‘childcare voucher’ scheme. The childcare voucher scheme will remain open to new entrants until April 2018, to support the transition between the two schemes. Parents who wish to continue using childcare vouchers following April 2018 will be able to if their employer continues to offer the voucher scheme.
The Government has developed the Childcare Choices website where parents can find out about the available Government support in one place. Here there is an easy-to-use childcare calculator where parents will be able to weigh up which offer is best for them.
When a parent in receipt of childcare vouchers opts to come onto Tax-Free Childcare, they will need to provide their employer with a Childcare Account Notice (CAN). This is a written document (which can be an email) stating that they wish to leave their employer’s voucher scheme and use Tax-Free Childcare. A parent will have 90 days from opening their Tax-Free Childcare account to give their CAN to their employer. At this point the employer will need to terminate their access to Employer-Supported Childcare. Employers are able to continue to support their employees with the costs of childcare, if they wish to, by paying into their parents’ childcare accounts. However, any contributions will have to be in accordance with income tax and National Insurance rules.