By Mark Jones, director of Carmarthen-based Clay Shaw Butler chartered accountants and business consultants. The Money Matters column appears in the Pembrokeshire Herald, the Carmarthenshire Herald and the Llanelli Herald newspapers.
The government is reminding working parents that they could ease this summer’s childcare costs by using Tax-Free Childcare (TFC).
The scheme is worth up to £2,000 a year for each child and allows parents to save regularly for childcare costs.
For each £8 saved, the government will make a top-up payment of £2.
The money saved can be put towards a range of registered childcare options from more than 68,000 childcare providers.
These include summer camps across the UK, as well as before and after school care during term time, nurseries and childminders.
The scheme is open to working parents, including the self-employed, who earn between the 16 hours a week at the minimum wage and £100,000 per year and have children under the age of 12 (or under 17 for children with disabilities).
The government will top-up up to £500 per quarter for each child, or £1,000 if the child is disabled.
Liz Truss, Chief Secretary to the Treasury, said: “We understand making arrangements for summer childcare at this time of year is important and can be a stressful time for parents.
“Tax-Free Childcare makes things easier, putting more money in the pockets of parents and supporting as many families as possible to secure high-quality, affordable childcare.
“Parents should visit the Childcare Choices website and take advantage of the range of offers to help balance their work and family lives while saving money.”
You can find out more and apply through the Childcare Choices website, www.childcarechoices.gov.uk.
It includes a Childcare Calculator that compares all the government’s childcare offers to check what works best for individual families.
How Tax-Free Childcare works:
Working parents can apply, through the childcare service, to open an online childcare account.
The scheme is available for children under the age of 12, or under the age of 17 for children with disabilities.
If you or your partner have an ‘adjusted net income’ over £100,000 in the current tax year, you will not be eligible.
This includes any bonuses you expect to get.
For every £8 that families pay in, the government will make a top-up payment of an additional £2, up to a maximum of £2,000 per child per year (or £4,000 for disabled children).
This top-up is added instantly and parents can then send payments directly to their childcare providers.
The maximum government top-up is £500 per quarter for each child, or £1,000 if the child is disabled.
All registered childcare providers – whether nannies, nurseries, childminders or after-school clubs – can sign up online now to receive parents’ payments through Tax-Free Childcare.
Parents need to sign back in every three months and confirm their details are up-to-date, to keep getting government top-ups.
Tax calendar date for your diary –
Monday 19 – PAYE, Student loan and CIS deductions are due for the month to 5th August 2019.
You can find out more about money matters on the Clay Shaw Butler website (under our news for business section) – http://www.clayshawbutler.com/news/latest-news-for-business
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