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Tax and Child Care

Government Schemes

Child care costs are a major expense for many people.

There are various Government assistance schemes:

  • Childcare Voucher schemes are now closed to new entrants
  • Free Childcare for younger children (3 or4 years old, some 2 year olds) at 15 hours a week or 30 hours a week depending on employment status – visit Childcare Choices for information
  • Tax subsidised childcare for older children (up to age 11) via a ChildCare Account (You pay in £8, Government £2) – visit Childcare Choices for information
  • Childcare via Tax Credits or Universal Credit

 

Childcare as a Business Expense

Unfortunately childcare is not a deductible expense for the Self Employed – Sole Traders and Partners

From October 2018, employers can no long provide new tax deductible Childcare Voucher Schemes or enter into new Directly Contracted Childcare Schemes – parents in these schemes already can continue.  This restricts the ability of a company director to deduct childcare costs in a similar way to the Self Employed.

Properly run workplace nurseries still attract tax exemption.