Guest Blog from Sally, Harrogate Mumbler, Jan 2020 – details subject to change.
Did you know you can pay for some childcare tax free?
No? Me neither until yesterday, but I’ve just signed up for the governments “Tax Free Childcare” scheme and already I’ve saved £12 on a single day school holiday club for my two daughters by using this scheme.
The Tax-Free Childcare scheme works like this: For every £8 you put into your Tax-Free Childcare account, the government tops it up by £2, you then use the money to pay for childcare – effectively tax free.
So what is the Tax-Free Childcare scheme?
Very basically, the Tax-Free Childcare gives eligible families up to £500 every 3 months (£2,000 a year) for each of your children (under 11 years old) to help with the costs of childcare, for free!
The best bits?
How does it work?
It takes about 20 minutes to set up your account on the .GOV website. Once it’s set up and you’ve been approved, they set up an on-line account for you and then you pay in however much money you want into your account. The government then tops up your account by 20%. You pay your childcare provider from this account (note; it takes a day for the money to show in your account then up to 5 days for the payment out to the child care provider)
Tax-Free Childcare covers most normal childcare providers (as long as they are with a regulator such as Ofsted, the Early Years Register or the Childcare Register) , such as; before & after school care, pre-schools, nurseries, playgroups, childminders etc. The provider must also be registered with the Tax-Free Childcare scheme so check before you try and pay with the scheme!
When you log in to your Tax-Free Childcare account, you’ll be able to see details of all local registered providers. If your setting is on there, you’ll be able to send payments directly through your account to them.
It’s different from Childcare Vouchers because you don’t have to do this through your employer and it works for self employed people too. Naturally there is eligibility criteria and it isn’t open to everyone so you should check the official guidance here however in brief the eligibility is this…
Eligibility (in brief)
You can check out the full eligibility criteria and apply here: gov.uk/get-tax-free-childcare
How does it work in practical terms?
I used the scheme to pay for a day holiday club for my 2 daughters. The cost should be £30 each so £60 total. Using this scheme it has actually cost me £48, so I have saved £12.
I won’t lie, it was slightly faffy to set up the first time round, but now it’s up and running it should be much slicker next time round.
Here are the steps you need to follow;
Note: I’m not a benefits expert so please take professional advice before applying, particularly if you are in receipt of other benefits, thanks Sally.
Thanks so much to our guest blogger Sally at Harrogate Mumbler. If you have family or friends in Harrogate be sure to let them know about the Harrogate Mumbler site.