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New childcare scheme for working parents

21 March 2013
Issue: 4396 / Categories: News , Income Tax

Employer-supported arrangements to continue alongside

The government has announced tax-free childcare for working families, which will be worth up to £1,200 a child.

The scheme will be phased in from autumn 2015. Initially, children aged under five will be eligible, and the age range will be extended over time to include under-12s.

Both parents will have to be in work to qualify, with each earning less than £150,000 a year and neither receiving support through tax credits or universal credit.

The existing employer-supported childcare (ESC) will continue for taxpayers who wish to stay with the arrangement.

Eligible ESC recipients may choose to move into the other system, but they will not be able to benefit from both.

The new scheme will be worth more than double the amount of a single claim for ESC for a family with two children, according to the Treasury, and it will be open to around five times as many families.

Details are expected following consultation. It is likely that parents will be able to open an online voucher account and have their payments topped up by the government.

They will be able to use the vouchers for childcare regulated by Ofsted in England, and by equivalent bodies in Scotland, Wales and Northern Ireland.

Issue: 4396 / Categories: News , Income Tax
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