Tax-free Childcare fully rolled out – find out what support is best for your family
Tax-Free Childcare is now available for all eligible families with a child under the age of 12 (under age 17 if the child has a disability) to apply.
Where it is in a parent’s best interests to use Tax-Free Childcare we will always advise them of this. However, in some cases, parents will be better off using Childcare Vouchers, accessing Tax Credits or Universal Credit, or using a combination of these. We urge all parents who are considering making a switch to Tax-Free Childcare to contact us before they do so, particularly as the Childcare Voucher scheme is due to close to new entrants in April 2018.
Tax-Free Childcare allows eligible families to claim 20% of their registered childcare costs from the Government up to a maximum of £2,000 per child, per year – £4,000 if the child has a disability. For more information, read our updated Big Changes, Big Choices guide, which explains how the scheme works and includes a comparison of Tax-Free Childcare and Childcare Vouchers, some practical examples of different scenarios in which parents are better off on one or other scheme, and answers to frequently asked questions.
What has happened since the launch of Tax-Free Childcare?
Since the launch of Tax-Free Childcare, parents and childcare providers have been in touch with us about problems they have had: either accessing the service to register for the scheme; or being able to register for the scheme but not being able to access their accounts to pay money in or transfer money out to their childcare provider. We are also aware of parents experiencing problems when they reconfirm their eligibility as required every three months. Have you experienced this? If so, please get in touch by calling us free on 0800 028 3008.
Some parents have been able to register to use Tax-Free Childcare without difficulty and, where it is in a parent’s best interests to use Tax-Free Childcare we will always advise them of this. However, we are concerned that some parents will make a switch to Tax-Free Childcare without having all of the information they need and could end up out of pocket as a result. Parents who have registered to use Tax-Free Childcare cannot use Childcare Vouchers and are no longer eligible for Tax Credits or Universal Credits.
We urge all parents who are considering making a switch to Tax-Free Childcare to contact us before they do so. In some cases, parents will be better off using Childcare Vouchers, accessing Tax Credits or Universal Credit, or using a combination of these. To February 2018, 66% of 5,299 callers to our Family Benefits Advice Service were better off on Childcare Vouchers and/or Tax Credits, rather than Tax-Free Childcare.
Childcare Voucher scheme due to close in April 2018
The Childcare Voucher scheme is currently scheduled to close to new entrants from April 2018. Parents who are already using the scheme at that time will be able to continue to do so. However, if a parent leaves the scheme they may not be able to opt back in, even if they find that they are worse off. We are lobbying for the Childcare Voucher scheme to be kept open to new entrants alongside Tax-Free Childcare so that parents can choose the form of support that best suits their needs. See our most recent news release for more information or contact us if you would like to discuss this in more detail.
Do you need help working out what is best for your family?
We know working out what financial help you need or best suits your family can be complicated and we are here to help.
Employers For Childcare’s Family Benefits Advice Service was specifically set up to ensure families claim the best support available to them, particularly with childcare costs. Call us today on 0800 028 3008 to get free, independent and confidential help and advice. One of our trained advisors will carry out a free personalised calculation setting out which form of financial support is best for you.