Childcare

The Government has announced, in its response to the consultation on childcare account provision, that National Savings and Investments (NS&I) will be the account provider for the tax-free childcare scheme say Harris & Co accountants Northampton #accountantsnorthampton

The Tax-Free Childcare scheme, announced at Budget 2013, will offer working families 20% support towards their childcare costs up to a maximum of £2,000 of government support per child per year. That is the equivalent of basic-rate tax relief on childcare costs of £10,000.

The decision on who was to be the account provider for this scheme follows consultations on private and public sector options to deliver Tax-Free Childcare accounts. NS&I and HMRC where considered under the public sector delivery options.

While there were a number of arguments both for and against the various options under consideration, the response document says the NS&I option was chosen as it ‘had real and particular advantages in terms of simplicity for parents and childcare providers, offering security for parents through a trusted brand with all funds guaranteed by the government, and speed of delivery’. Moreover, it was found that the factors favouring the other options did not outweigh the advantages of the NS&I option.