Update on Tax Free Childcare
Further detail has been released on the new tax free childcare scheme that HMRC are set to debut in early 2017.
Under the scheme eligible parents open an online account, which they can use to pay a registered childcare provider. HMRC top up the account with £2 for every £8 paid in, up to a limit of £2,000 per child per year, or £4,000 for disabled children.
Parents will have to be in work to qualify with each earning around £115 a week. However, they will be ineligible if they earn in excess of £100,000 a year.
Parents who are enrolled in an employer operated childcare voucher scheme can continue in that scheme or switch to the new scheme. They are advised to consider which scheme is more beneficial to them before making a decision. Childcare voucher schemes will be open to new entrants until April 2018.
If you’d like to discuss this further please contact Green & Co.
Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.