Self Employed Parents! Save Money on your Summer Childcare with the Tax-Free Childcare Scheme

19 Jul, 2018 Self employed
Self Employed Parents Save Money On Your Summer Childcare With The Tax Free Childcare Scheme Primus Tax

Have you got your childcare sorted for over the Summer holidays?

For Self Employed parents, the annual summer holiday struggle is real. 
Covering childcare for 6 weeks or more can be a real drain on family finances, especially if one or both parents work for themselves and have no paid leave to fall back on.
Many of you will have plans in place already. 
But if you've been putting off booking because you're worried about the cost, don't forget that you can use the new Tax Free Childcare Scheme to help lessen the impact on your family budget this Summer.

How does it work?

Unlike childcare vouchers (which were available to employees only) the Tax Free Childcare scheme is open to eligible Self Employed parents with children under 12.

For every £8 that families pay in, the Government will make a top-up payment of an additional £2, up to a maximum of £2,000 per child per year (or £4,000 for disabled children).

The maximum government top-up is £500 per quarter for each child.

The monies can be used to pay for registered childcare providers, including childminders, schools, nannies, after school clubs and playschemes.

Parents can find out what help is available on the Childcare Choices website at: 

On the site, you can also find a Childcare Calculator where you can compare all the Government’s childcare offers to see what works best for you.

Please note, if you apply for Tax-Free Childcare, you won’t be able to get:

  • Child Tax credit
  • Working Tax credit
  • Universal credit
  • Childcare vouchers from any employer

If you’re thinking about opening a Tax-Free Childcare account, please do ensure you check how your personal situation will be affected first.

Am I Eligible for Tax-Free Childcare?

You (and your partner, where relevant) need to expect to earn a minimum average of £125 a week (which is equal to 16 hours at the living wage). 

If you or your partner are on maternity, paternity or adoption leave, or you’re unable to work because you yourself are disabled, or you have responsibilities as a carer, you might still be eligible.

If you (or your partner) expect to earn £100,000 or more, you can’t get Tax Free Childcare.

You can’t use Tax Free Childcare at the same time as childcare vouchers, Universal Credit or tax credits. 

You can use it with the 15 and 30 hours schemes.

And how about Childcare in the Summer Holidays?

58,000 registered childcare providers have signed up to accept Tax-Free Childcare payments over Summer, including schools, football, art and tennis clubs.

You can find out more information on what is available in your local area from the Childcare and Family Services Finder:

You can also contact local schools or community centres to see what activities are on offer.

Many run schemes ranging from sports coaching to dance and music sessions and, if they are Ofsted registered, they may also have registered to accept Tax Free Childcare payments.

Many School Holiday day camps are also accepting payments through the scheme, including:

What happens once I’ve applied?

Once your new account is opened and you start paying monies in, your government top up is added instantly and you can use it to send electronic payments to your childcare provider immediately.

Got a question? If you'd like to speak to one of our friendly tax experts about any of the issues covered here, get in touch today!

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