Running your own business often means juggling a lot - and for many, that includes childcare. With autumn school breaks rapidly approaching, HMRC is reminding working families that the Tax-Free Childcare scheme can be a good way to make some savings.
What’s on offer
Through the scheme, you can get up to £2,000 a year toward childcare costs for each child up to the age of 11, or up to £4,000 (up to the age of 16) if your child is disabled. The government adds £2 for every £8 you pay into your childcare account - and you can use that money to pay for approved childcare, such as nurseries, wraparound childcare, after-school clubs, or holiday clubs.
Your childcare provider needs to be signed up to the scheme before you can pay them, so you do need to check with them to see that they’re signed up.
It’s completely flexible: you can pay in whenever you like, use it straight away, or leave it in the account until needed. If your plans change, any unused money can be withdrawn.
Who can use it
You don’t need to be on a payroll to qualify - self-employed parents can use the scheme too. Your family may be eligible if:
- Your child is 11 or under (or 16 if they have a disability).
- You and your partner (if you have one) earn, or expect to earn, at least the National Minimum Wage or Living Wage for 16 hours a week on average.
- You each earn less than £100,000 per year.
- You’re not claiming Universal Credit or childcare vouchers.
How to get started
You can apply online by visiting the Tax-Free Childcare section of GOV.UK. Each child needs their own account, and the government top-up is added to each one separately.
Once your account is open, you’ll need to reconfirm your details every three months to keep the top-up payments coming. With school holidays around the corner, now’s a good time to check if you’re eligible and set up your account - especially if you’re self-employed or running a small business and need reliable childcare to keep work flowing smoothly.
UK businesses are facing a “cost of business crisis”, according to the British Chambers of Commerce (BCC). Its new cost-stack calculator shows government policy alone has pushed up an average firm's expenses by 70% over the past decade, adding roughly £827,000 a year in costs for a typical mid-sized business. About a quarter of the rise stems from the increase in employer National Insurance contributions, with the higher minimum wage and mandatory pension auto-enrolment also major contributors.
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