Budget Summary 2021
What can get an accountant more…
3rd March 2021Are you aware that there are different schemes available to help towards your childcare costs? To find out which is the best option for you, please read below.
What do I need to know?
If you are a working parent, then you are eligible to claim a tax-free top up from the Government to help with childcare costs.
You could be given a top-up which will be worth £2,000 a year.
There is a higher top up of £4,000 a year available for disabled children.
If you want to receive the top-up, then you must open an account online and the government will provide a top-up of £2 for every £8 deposited by the parents, up to the limits above.
The money in the account will then be used towards paying for childcare with a registered provider.
Does it apply to me?
The government childcare scheme is open to both the employed and the self-employed.
To be eligible you and your partner must earn a minimum of £131.36 per week. This totals up to £1,707.68 over three months.
The limit above does not apply if you are self-employed and started your business within the last three months.
If you or your partner have a combined income of more than £100,000 then you will not be eligible for tax-free childcare.
What are the conditions?
Tax-free childcare is only available to children who are aged 11 and under and live with the claimant.
Children are not eligible for the scheme once the 1 September following their 11th birthday has passed.
Disabled children remain eligible for tax-free childcare until they are 17.
Tax-free childcare can only be used to pay for approved childcare such as childminders, nannies, after school clubs, nurseries and playschemes that have signed up to the scheme.
Employer-supported childcare and childcare vouchers
You should be aware that you cannot claim both the government childcare scheme and employer-provided childcare vouchers or employer-supported care, as you can only claim one.
If you apply for tax-free childcare, then you should inform your employer within 90 days of making the application.
How do I apply?
If you believe you are eligible and you want to apply for tax-free childcare, then you can fill in an application online at www.gov.uk/apply-for-tax-free-childcare.
Further Actions
You should weigh up the options that are available to you and decide which would be the most tax-efficient option for you.
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Any questions?
If you’d like a meeting or a Skype call to discuss this, please get in touch with your favourite Liverpool accountant
• You can ring us on 0151 380 8080
• You can email us at growth@jondaviesaccountants.co.uk