tax free childcare

Tax Free Childcare and UK Employers

In our previous article we looked at Tax-Free Childcare from the perspective of UK parents (click here to access the article and get rates, qualification and application details); in this article we’ll approach the scheme from the employer’s perspective – Tax Free Childcare and UK Employers, what you need to know.

 

Tax Free Childcare

What UK employers need to know

Companies can make payments into their employee’s childcare account. This can be done on behalf of the employee through the company payroll or supplementary payments can be made by the employer. If supplementary payments are made these are subject to appropriate deductions.

Scope

You can get up to £500 every 3 months (up to £2,000 a year) for each of your children to help with the costs of childcare. This goes up to £1,000 every 3 months if a child is disabled (up to £4,000 a year).

If you’ve already registered, you can sign in to your childcare account. Set up an online childcare account for your child. For every £8 you pay into this account, the government will pay in £2 to use to pay your provider.

Employees moving from Employer-Supported Childcare to Tax-Free Childcare

Employees need to provide their employer with a Childcare Account Notice (CAN) when moving from Employer-Supported Childcare to Tax-Free Childcare. A CAN is just written documentation, which can be in the form of an email, that states that the employee wishes to leave the employer’s voucher scheme and use Tax-Free Childcare. The employee has 90 days after opening a Tax-Free Childcare account to provide a CAN to their employer. Once you, the employer, have their CAN, you must terminate the employee’s access to Employer-Supported Childcare.

Assistance for your employees

To assist your employees with their childcare decisions you should direct them to: www.childcarechoices.gov.uk

If your employees are considering childcare vouchers the following link will help them assess if it’s of benefit to them or not (as childcare vouchers may affect their tax credits): www.gov.uk/childcare-vouchers-better-off-calculator

If your employee wants to apply sign in to their childcare service account they can do so here.

Childcare Providers

As mentioned in our previous article on this topic (click here access it), for parents to avail of the Tax-Free Childcare scheme they must use a childcare provider that is signed-up to the scheme. Childcare providers can sign-up to Tax-Free Childcare here.

For more on Tax-Free Childcare read:

Child Benefit Tax Entitlements

Changes to the Maternity Benefit Application Form

Maternity Benefit Revenue Guidelines Explained

 

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