Goodbye Childcare Vouchers – Hello Tax-Free childcare!

On 4 October 2018 the Childcare voucher scheme was closed to new entrants.  If you were lucky enough to work for an employer who offered the scheme and you had taken it up, then you will still be able to continue with it. However, if not, then as of 4 October, you are no longer able to take part.

However, subject to certain criteria – set out below, you may be able to take advantage of the Tax-Free childcare that has replaced Childcare Vouchers. Which scheme is more beneficial to you, I’ll leave you to work out – I’ve included a link at the bottom of the page to the HMRC site with more details.

You will not be able to use both schemes, so if you do currently have Childcare vouchers, you may want to use the link at the bottom of the page to see which is the best scheme for your circumstances.

Self employed?

There is one big advantage, as far as I’m concerned, to the Tax-Free childcare and that is that you’re able to qualify if you’re self employed – you didn’t qualify for Childcare Vouchers if you were self employed. Also, you do not need to wait for your employer to offer it, this is something that you can apply for yourself.

 

What does it do?

  • You can receive up to £2000.00 per year of Tax-Free childcare (or up to £500.00 every three months)
  • For every £8.00 you pay in childcare, the Government will pay for £2.00.
  • If you are entitled to 30 hours per week of free childcare for a child, you will also be able to use this scheme for childcare for other children – but not the child that is entitled to the 30 hours of free childcare!

Who’s eligible?

  • You must be working (or getting Statutory Sick Pay, Shared Parental Leave (SPL) etc or annual leave. (although you can’t claim the tax-free childcare for the child that you’re on SPL for!)
  • Both of you need to be working if you’re a couple.
  • You must earn at least the National Minimum Wage and work a minimum of 16 hours per week. However, if you’re self employed and have started your business within the last 12 months, then this criteria will not apply to you.
  • Your child must be 11 years old or under – they will stop being eligible on 1 September after their 11th birthday.
  • If your child is registered as disabled you may be entitled to receive up to £4000.00 per year until they are 17 years old.

Who’s not eligible?

  • If either you or your partner have taxable income that is over £100,000.00 per year then you will not qualify.
  • If you are from outside the EEA and your residence card says you cannot access public funds.
  • If you are fostering a child (adopted children do qualify)
  • If the child you are claiming for does not normally live with you.
  • If you are claiming working tax credit, child tax credit, universal credit  or childcare vouchers you will not be eligible.

For further information and to check if this is the scheme for you, please use this link to access the Government website.

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