Tax-Free Childcare is a government scheme that helps working parents, including the self-employed and company employees, with childcare costs.
If eligible, you could get up to £2,000 per child, per year to spend on qualifying childcare. If you claim Tax-Free Childcare, the government will pay £2 for every £8 you pay your childcare provider via an online account.
Parents are usually eligible if they (and their partner, if they have one) are:
- in work, or getting parental leave, sick leave or annual leave
- each earning at least the National Minimum Wage for 16 hours a week, which equates to £125.28 if they are 25 or over.
If you are self-employed and started your business less than 12 months ago, this earnings limit will not apply. If your self-employed income varies over time, you can average your profits out across the tax year to meet the minimum income requirement.
You aren’t eligible if:
- your child does not usually live with you
- the child is your foster child
- either you or your partner has a taxable income over £100,000
- you’re from outside the EEA and your UK residence card says you cannot access public funds
Full details and more information on Tax-Free Childcare is available on the government’s website here:
https://www.gov.uk/tax-free-childcare
This publication has been prepared by Robinson Reed Layton LLP. It is to be treated as a general guide only and is not intended to be a comprehensive statement of the law or represent specific tax advice. No liability is accepted for the opinions it contains, or for any errors or omissions. All rights reserved.