Tax free childcare - The basics for contractors
by Nexus Contractor Accounting
The Government’s Tax Free Childcare scheme offers parents up to £2,000 a year towards the cost of childcare for each child under the age of 12, and £4,000 for any child with a disability under 17.
How it works
Parents are able to open an online account through the government website and make payments directly into the account. For every £8 paid in, the Government shall contribute £2 up to the value of £2,000 a year or £4,000 for a disabled child up to the age of 17. These funds can then be used to pay for childcare to a registered childcare provider.
To be eligible each parent within the household must:
- Be in work and earning at least the national minimum wage or living wage
- Be earning less than £100,000
- Ensure the registered childcare provider is signed up to the scheme before benefitting from Tax-Free Childcare.
- Not be claiming Working Tax Credit, Child Tax Credit, Universal Credit, or Childcare Vouchers.
In order to benefit from the scheme, the childcare provider must be registered. This includes being registered with a regulator such as Ofsted as well as the Tax Free Childcare Scheme.
Help towards childcare provided by a school is also available providing the child is over 5 years old and the childcare is provided outside of school hours and on the school premises.
Childcare may be provided by a relative, if they’re a registered childminder and provide childcare outside your home.
How can Nexus help?
As specialist contractor and freelance accountants, our team has years of experience in the contractor market. If you would like to find out more about the childcare options available to you please visit our site call our help desk on 0161 791 1674.