Tax-Free Childcare – Do Your Employees Know?

High Income Parents

As a Partner at Raffingers Stuart and a parent myself, I am well aware of the difficulties working families face. Therefore, when I read the new initiative from HM Revenue & Customs (HMRC), concerning Tax-Free Childcare, I thought I had better pass on the good news. To help working parents HMRC will be introducing Tax-Free Childcare from autumn 2015, which will help with childcare costs, as well as supporting parents, if they wish, to get back into the workplace and to increase their working hours. If you own or run a business that already provides childcare support through Employer-Supported Childcare (ESC), you will be able to continue offering the scheme for as long as you want, but only to existing members. From autumn 2015, you will not be able to move any other employees to the scheme. Any of your employees claiming the ESC will also need to decide whether to continue being part of the scheme or to move to Tax-Free Childcare – both schemes cannot be claimed. Tax-Free childcare will be available to parents who have children under 12. If your employees wish to claim Tax-Free Childcare they can register directly with the Government and open a childcare account. They will then receive 20% support towards qualifying childcare costs, up to a limit of £2,000 per child per year. It is up to you and your business about how much of a role you would like to play in this new scheme. Further guidance will be released later in the year, but if you would like to find out more now visit www.gov.uk.