Are you utilising Tax-Free Childcare worth £2,000 per child over the summer holidays?

Are you utilising Tax-Free Childcare worth £2,000 per child over the summer holidays?

In a recent YouGov poll, 31% of parents said they felt stressed trying to arrange childcare for the school holidays.

However, now that the summer holidays have arrived there may be some help at hand by way of Tax-Free Childcare.

That is because working parents who incur summer holiday childcare costs can use Tax-Free Childcare (TFC), which is worth up to £2,000 per child per year, to pay for regulated holiday clubs during the school holidays.

How does it work?

Launched in April 2017, Tax-Free Childcare means that for every £8 a parent pays in, the government will pay in an extra £2. So it effectively gives you basic-rate tax back on what you pay, hence the scheme’s name.

Parents can receive a maximum of 20% (£2,000) on childcare costs of up to £10,000 per child, per year. Higher limits apply for disabled children.

Do I qualify?

The scheme is available to all eligible workers including the self-employed.

Generally, to qualify, 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.

The scheme is available for children up to the age of 12, or 17 for children with disabilities. Parents will need to open an online account, which they can use to pay for childcare from a registered provider.

Parents are advised that it is possible to pay into their account regularly and ‘save up’ their Tax-Free Childcare allowance and use it for childcare during school holidays.

How do I apply for Tax-Free Childcare?

It takes approximately 20 minutes to apply and you will need to provide details including your:

    • National Insurance number
    • Unique Taxpayer Reference (UTR), if you’re self-employed

Applications can be made via the .gov website

Contact us to find out how we can help with tax-free childcare and wider tax planning opportunities here.

1280 853 Rouse Partners

Rouse Partners

Award-winning chartered accountants offering tax, audit and advisory services. See more

All stories by : Rouse Partners

This information has been produced by Rouse Partners LLP for general interest. No responsibility for loss occasioned to any person acting or refraining from action as a result of this information is accepted by Rouse Partners LLP. In all cases appropriate advice should be sought before making a decision.

Let's stay connected

Sign up to our quarterly e-newsletters, with the latest tax and industry updates from our team.

Still undecided? See our most recent newsletter.

Privacy Preferences

This website uses cookies that help it function and to help us provide an improved user experience.

Necessary cookies: These enable core functionality such as security and accessibility. You may disable these by changing your browser settings, but this may affect how this website functions.

Performance cookies: Below you can change your privacy preferences for performance cookies which help us to review and improve our website experience.

 
We use cookies to help our website function and to improve your experience. Please confirm your preferences and/or agree to our use of cookies.