Introduction to Tax-Free Childcare
At Little Lionhearts Nursery School, we understand the importance of affordable childcare. That’s why we’re providing this guide to Tax-Free Childcare, a government scheme that can significantly reduce your childcare costs. In 2023, it’s more relevant than ever, with a 24% increase in families benefiting from the scheme compared to the previous year.
What is Tax-Free Childcare?
Tax-Free Childcare is a government initiative designed to help working parents with their childcare expenses. For every £8 you contribute to your Tax-Free Childcare account, the government adds £2, up to £2,000 per year per child (or £4,000 for children with disabilities).
Here is a video explanation provided by daynursery.com
To be eligible:
- Your child must be 11 or under (or 17 if they have a disability).
- You (and your partner, if applicable) must be working and expect to earn at least the National Minimum Wage or Living Wage for 16 hours a week on average.
- If you or your partner earns over £100,000, you are not eligible.
Benefits of the Scheme
- Savings: You can save up to 20% on childcare costs.
- Accessibility: The scheme is open to self-employed and employed parents.
- Versatility: Funds can be used for various childcare options including nurseries, childminders, and after-school clubs.
How to Apply
- Create an Account: Set up an online account for your child on the government’s website.
- Contribute Funds: Pay into this account and the government will top up your contributions.
- Pay Your Provider: Use this account to pay your childcare provider.
- Every three months, you’ll need to log into your account to reconfirm your details to continue receiving contributions.
How Much Can You Receive?
- You can receive up to £500 every three months per child, or £1,000 for a child with a disability.
- To maximise the benefit, you would need to spend at least £10,000 a year on childcare.
Using the Funds
- The funds can be used to pay for a range of approved childcare services, including those provided by Little Lionhearts Nursery School.
Tax-Free Childcare is an excellent opportunity for parents at Little Lionhearts Nursery School to make childcare more affordable. We encourage eligible families to take advantage of this scheme and are here to assist with any questions or concerns you may have.
If you’re not eligible for Tax-Free Childcare, other support options are available, such as Universal Credit. Find out more on our Fees & Funding page.