Tax-Free Childcare

Tax-Free Childcare provides tax relief for individuals on their qualifying childcare costs. This factsheet considers the key principles and requirements.

Call 01323 411222 or email info@advanta-ca.com

Tax-Free Childcare replaced Employer Supported Childcare, and has the advantage that the self employed, as well as employed individuals, can make use of the scheme. At Advanta, we can provide guidance on Tax-Free Childcare and Employer Supported Childcare in the Eastbourne or surrounding areas.

The government operates a tax incentive for childcare Tax-Free Childcare (TFC).

Overview

Under TFC the tax relief available is 20% of the costs of childcare up to a total of childcare costs of £10,000 per child per year. The scheme will therefore be worth a maximum of £2,000 per child (£4,000 for a disabled child). Parents are able to apply for TFC for children under 12 (up to 17 for children with disabilities).

To qualify for TFC all parents in the household must generally meet a minimum income level, based on working 16 hours a week at National Minimum Wage or Living Wages rates as appropriate and each earn less than £100,000 a year and not already be receiving support through Tax Credits, Universal Credit or the childcare voucher scheme.

Online account

Parents are able to register with the government and open an online account. The government will then 'top up' payments into this account at a rate of 20p for every 80p that families pay in.

Self-employed

Self-employed parents are able to get support with childcare costs using the TFC scheme, unlike the employer supported childcare voucher scheme. To support newly self-employed parents, the government has introduced a 'start-up' period. During this period a newly self-employed parent will not have to earn the minimum income level.

TFC and service issues

All parents of eligible children can apply for both 30 hours of free childcare and TFC via a single website. Parents can apply online through the childcare service which can be accessed via the Childcare Choices website.

Childcare providers

Only childcare providers registered with a regulator can receive Tax-Free Childcare payments.

How does this relate to employer supported childcare?

Employer Supported Childcare (ESC) closed to new entrants in October 2018. ESC continues to be available for current members if they wish to remain in it or they can switch to TFC but parents cannot be in both ESC and TFC at the same time.

How we can help

If you are in the Eastbourne area please do contact us for guidance on Tax-Free Childcare.

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By instructing us with a fixed fee agreement you can have unlimited access to all our team. This means that you can call on us at any time knowing that the meter is not running. So we hope that you will feel free to speak to us whenever you need to, without having to worry about the cost. If any extra work arises we will give you a fixed price quotation for the extra work before it is started.

Contact us

Contact Details

Please call:
01323 411222

Advanta Business Services Limited, 29 Gildredge Road, Eastbourne, East Sussex BN21 4RU

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