It’s July, the kids have broken up from school. You work a full time job, or run your own business. . . what do you do now?

With the average holiday allowance being around 25 days and contracts set to certain deadlines, it comes as no surprise that the number of dates available vs the amount of childcare needed doesn’t quite add up!

With this in mind, are you aware of the Tax-Free Childcare (TFC) available throughout the summer holidays?

Tax-Free Childcare is available for parents with children aged up to 11 years old or for 17 if they have a disability.

How does it work?

HMRC will help working parents by providing a ‘top-up’ credit to help pay for childminders, nurseries or holiday clubs required to support parents throughout the summer holidays.

• Apply for an account online directly with Tax Free Childcare – an account must be applied for, per child.
• You can then register with the appropriate childcare provider choosing from over 72,000 registered providers with Offstead: Approved Childcare.
• The government will then give a 20% top up to funds deposited into the account – for every £8 deposited, parents will get a £2 top up. This is capped at £500 every 3 months or at £1,000 for a child with disabilities. Deposits can be made any member of the family, not just the parents.
• Parents must register to confirm they require this service every 3 months. If you fail to do so, the top up contribution will be halted.

This scheme also applies to those on sick leave, annual leave, maternity/paternity leave or adoption leave. This can also apply to those who are on the furlough scheme due to the Covid-19.

Who is exempt?

There are some rules that apply to parents should they wish to apply:

• Parents are not eligible should they have an ‘adjusted net income’ of £100,000 in the current tax year.
• The net income must include bonuses expected to receive, which are not exempt.
• This is not offered to those already receiving childcare vouchers (this was stopped in 2018 and replaced with tax-free credits).

Need more help?

For further information, speak to our fully qualified specialist accountants who can help you every step of the way. Simply call 0207 096 2659 or email christian@integroaccounting.com.