Yes, that’s right, Tax-Free!

Trying to find the right work/life balance is tough, and is made worse when you take into account the financial burden of childcare.

Well, the government have come up with two new initiatives that will go a long way to help working parents, both of which are launching this year:

Up to 30 hours ‘Free Childcare’ which starts in September 2017

• This is an extension of the existing 15 hours of “free childcare” that is currently available after your little one turns 3.
• If your child will be 3 on 31 August 2017, you can apply now for your extra hours on the HMRC website.

Tax-Free Childcare’ which begins immediately replacing the existing Childcare Vouchers scheme (which will close to new entrants in April 2018)

• The scheme is available to parents of children up to the age of 12 (or 17 for children with disabilities).
• Here’s the best bit … for every £8 that you pay into a Tax-Free Childcare account, the government will add an extra £2. In total you’ll be able to use the scheme to pay for childcare of up to £10,000 per child each year – so you could get an extra £2,000 per child each year.
• If you’re a working parent with a little one who will be under 4 on 31 August 2017, you can apply now on the HMRC website for an online digital account. The scheme will be rolled out to all other parents by the end of 2017.
• You should be aware that you can’t claim tax-free childcare if you are already in receipt of childcare vouchers, but you can elect to move to the new scheme should you wish to.
• And one of the great things about this new scheme is that it’s also open to the self-employed!
• Plus it can be used in addition to the “Free Childcare” scheme detailed above, so you’ll only be paying for 80% of your childcare costs in excess of 30 hours a week.

In order to qualify for either of these new schemes, you, and any partner, must be in work and earning at least £120 per week, but neither of you can be earning more than £100,000 per year.

You can check your specific circumstances on the government website, which also includes details of how you can apply for these new schemes: www.childcarechoices.gov.uk. If we are your accountant and you would like more information on this please call 01872 300232 or email us at hello@hivebusiness.co.uk.