Parents with children under nine can now apply for the Tax-Free Childcare scheme for ALL of their offspring - but some families with older children will have to wait until February.
The Government's scheme, which gives eligible parents or guardians up to £2,000 free per child towards childcare costs each year, has now been extended to include children under nine or who had their ninth birthday yesterday, plus any of their siblings who are under 12.
Parents of children who turned nine before 15 January 2018 will, however, have to wait until 14 February to apply for the scheme. Parents of children under 17 years old with a disability have been able to apply for Tax-Free Childcare since the scheme launched.
The scheme was initially launched in April for those with children aged under four on 31 August 2017 and was extended in November to parents of kids aged four and five, but the expected rollout to all children under 12 by the end of 2017 was delayed.
The delay was just one in a long series of problems with the scheme, which was subject to almost 1,000 official complaints in the three months after its launch.
What is Tax-Free Childcare?
Under the Tax-Free Childcare scheme, parents and carers in the UK can open a special account to save for childcare costs.
For every 80p you deposit, the state adds 20p. In total the state can add up to £2,000 per child a year (or up to £4,000 if your child has a disability) - so including what you deposit, you can use the scheme to pay for up to £10,000 of childcare per child each year.
It's worth noting you can only get a maximum top-up of £500 every three months, but the state's extra 20% is added at the point you put money into your Tax-Free Childcare account, not when you spend it.
So if you have seasonal costs, put money into the account throughout the year, accruing the full top-up as you go, then spend it only when you need to – thus avoiding the £500 per three-month limit.
Which children are eligible for the scheme?
The Tax-Free Childcare scheme is now available to children who were under nine or had their ninth birthday on 15 January 2018.
It has also been extended to include the siblings of those who are eligible for the scheme as they were were under nine, or turned nine yesterday.
- You and your partner must both be in work in the UK (those who are self-employed now also qualify).
- You must be 16 or over. If you're over 21 you must earn on average at least £120 a week, unless you're in your first year of self-employment.
- You must earn less than £100,000 a year each.
- You can't get other support with your childcare, including from a Childcare Voucher or salary sacrifice scheme.
The scheme will open to all remaining eligible families with children under 12 on 14 February 2018.
How do you apply for the scheme?
You need to sign up for an account on the Childcare Choices website.
To sign up you'll need:
- your national insurance number.
- if you're self-employed, your unique taxpayer reference.
- the date you started, or are due to start work.
- details of any other Government support you get.