Tax Free Child Care Account - BEWARE: Raising awareness for Parents:

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Parents who sign up for the tax free child care account will lose the 70% tax credit element of their working tax credits. Some parents are better off and some are certainly not. Our advice is to compare your options BEFORE you actually open the accounts as there is no going back.


Currently, for those who are employed there is the Employer Supported Childcare Scheme where employers can purchase child care vouchers to give to their employees who in turn use these to pay the child care registered carer. These can then be used by the employee (parent) to pay for registered childcare. This benefits employers too where this amount is free of NIC and can potentially save up to £402.00 per employee. This applies per employee so for joint parents both can claim.


So there is a choice in whether to claim the above OR


To sign up for the tax free child care account in the name of the child. (This needs to be considered very carefully! see note above) The way this works is; payments are made into this account by the parents or even the grandparents. For every 80p paid in, the government will top this up by 20p - to a maximum of £2000 (Effecting £8,000 pa of money deposited).This applies per child and is applicable to both employed and self-employed parents. Once the account is opened there is no going back.



Please get in touch if you would like to book a consultation to discuss. Tel: 01252 522221 or email us on Childcare@tayloraccounting.co.uk

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Added By: Sue Taylor on 22nd Aug 2017 - 18:02
Number of Views: 598
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