Childcare scheme announced

The Government has confirmed that Tax-Free Childcare will be launched in autumn 2015 and will be available to all eligible families with children under 12 within the first year of the scheme’s operation, with a cap of £2,000 per child say Harris & Co accountants Northampton

This announcement follows feedback from a consultation which ran from 5 August 2013 to 14 October 2013.

The consultation originally proposed to make Tax-Free Childcare available to families with children up to age five from the first year of operation, with the scheme building up over time to include children under 12. However, the Government has decided, following feedback, to make this scheme available to eligible families with children under 12 from the first year of the scheme’s operation. In addition, the cap per child has been increased to £2,000, instead of the £1,200 previously proposed.

As well as introducing Tax-Free Childcare, the Government confirms it will raise the rate of the Universal Credit childcare element from 70 per cent to 85 per cent. In addition, free nursery care for three and four year olds has been extended to 15 hours a week, and free nursery care for the most disadvantaged two-year olds has been introduced.

The Government’s response to the consultation on design and operation of Tax-Free Childcare is available here.

In connection with this announcement, the Government has put together a short guide listing the top ten things to know about the new Tax-Free Childcare scheme along with an infographic to explain how the scheme will run. These can be found at GOV.UK.