Ten things your clients should know about the government's new Tax-Free Childcare Scheme...
1 The scheme will launch in autumn 2015
You'll be able to open an online account, which you can use to cover the cost of childcare with a registered provider. This will be done through the government website.
2 For every 80p you 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.
3 The scheme will be available for children up to the age of 12
It will also be available for children with disabilities up to the age of 17, as their childcare costs can stay high throughout their teenage years.
4 To qualify, parents will have to be in work, earning just over an average of £50 a week and not more than £150,000 per year
The scheme is designed to be flexible for parents if, for example, they want to get back to work after the birth of a child or work part-time.
5 Any eligible working family can use the Tax-Free Childcare scheme - it doesn't rely on employers offering it
Tax-Free Childcare doesn't rely on employers offering the scheme, unlike the current scheme Employer-Supported Childcare. Any working family can use the Tax-Free Childcare scheme, provided they meet the scheme's eligibility requirements.
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