Temporary Changes To Tax-Free Childcare
You may now be eligible ...
Posted by Roger Eddowes on 18/05/2020 @ 8:00AM
A recent announcement from the Government offers a temporary relaxation of the criteria to receive tax-free childcare and up to 30-hours of free childcare during the Coronavirus outbreak. This is excellent news for parents returning to work ...
The Government has announced some welcome temporary changes to tax-free childcare!
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Tax-free childcare is available to about two million households to help with the cost of childcare, enabling more parents to go out to work, if they want to, to provide greater security for their families.
"In summary for every 80p a parent or someone else pays in, the government will top up an extra 20p!"
This is equivalent of the tax most people pay - 20% - which gives the scheme its name, 'tax-free'. The government will top up the account with 20% of childcare costs up to a total of £10,000 - the equivalent of up to £2,000 support per child per year (or £4,000 for disabled children).
The scheme is available for children under the age of 12 and for children with disabilities under the age of 17, as their childcare costs can stay high throughout their teenage years.
To qualify, parents will have to be in work, and each earning at least 16 hours of the national minimum wage a week and not more than £100,000 each per year!
During this COVID-19 pandemic, individuals whose earnings are now below the normal minimum income requirement,, but would normally expect to meet the income requirement, remain eligible.
In addition, critical workers who may have exceeded the maximum income threshold of £100,000 per year because of increased hours as a direct result of coronavirus, will still be eligible for 30 hours and tax-free childcare for the current tax year
"HMRC's guidance includes special arrangements
for critical workers!"
Those who may have missed the 31 March deadline for reconfirmation or application for 30 hours free childcare. Local authorities will be able to extend the validity dates on 30 hours codes for eligible critical worker parents during the summer term.
Until next time ...
Would you like to know more?
If anything I've written in this blog post resonates with you and you'd like to discover more about whether you're eligible for tax-free childcare, call me on 01908 774320, leave a comment below or click here to ping over an email and let's see how the Business Godparent can help you.
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About Roger Eddowes ...
Roger trained at Edward Thomas Peirson & Sons in Market Harborough before working at Hartwell & Co, followed by Chancery, as a partner. He started Essendon Accounts and Tax with Helen Beaumont in 2014 as a general practitioner with a hands-on approach.
Roger loves getting his hands dirty, working with emerging, small-to-medium and family businesses to ensure they receive the best possible accountancy advice. Roger utilises an extensive network of business contacts to leverage the best guidance and practical solutions.
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