Contributed by ACCA, in their own words
The Tax-Free Childcare Scheme includes an increased costs cap and will support working families with children under 12
In the Autumn Statement 2013, it was announced that a new childcare scheme would be introduced to support working families with their childcare costs. It was proposed that for childcare costs of up to £6,000 per year per child, support of 20% would be available worth up to £1,200, and that, from the first year of operation, all children under five would be eligible, with the scheme building over time to include children under 12.
In the Budget 2014, the Chancellor confirmed that the tax-free childcare costs cap, against which parents can claim 20% support, will be increased to £10,000 per year for each child.
This will mean that eligible parents can now benefit from greater support, worth up to £2,000 per child each year.
Speedy implementation
The Tax-Free Childcare Scheme will also be implemented more quickly than previously announced. From autumn 2015, the scheme will be available to all eligible families with children under 12 within the first year of operation.
The Scheme will provide support for families where parents are in work and not receiving support through the childcare element of working tax credits/universal credit. It will not be available to families with an income over £150,000. Support will be provided through a childcare account redeemable at any registered childcare provider.