After undue delays the Government have finally announced that the new tax-free childcare system will go live in early 2017. However this will be for parents with young children.
Parents with older children will be phased into the scheme over the year and everyone will be eligible by the end of 2017 although now specific dates have been given.
It’s also worth noting that the government have quietly reduced the threshold at which you can qualify for the new scheme from £150k to £100k. Whilst employees on the current childcare voucher scheme may be in no hurry to join the new scheme, it will certainly be welcomed by self-employed individuals who have not been provided with any equivalent childcare support before.
Top ten things to know about the new Tax-Free Childcare scheme.
- You’ll be able to open an online account
- For every 80p you or someone else pays in, the government will top up an extra 20p
- The scheme will be available for children up to the age of 12
- To qualify, parents will have to be in work, and each earning around £115 a week and not more than £100,000 each per year
- Any eligible working family can use the Tax-Free Childcare scheme – it doesn’t rely on employers offering it
- The scheme will also be available for parents who are self-employed
- If you currently receive Employer-Supported Childcare then you can continue to do so
- Parents and others can pay money into their childcare account as and when they like
- The process will be as simple as possible for parents
- You’ll be able to withdraw money from the account if you want to
For more information about the impact of the new tax-free childcare scheme, get in touch with your Menzies relationship partner or contact Menzies.