You’d be forgiven for thinking, from the news coverage recently, that tax-free childcare was imminent. However, behind the excitement is the fact that the new proposals to provide 20% of working families’ childcare costs are just that, proposals, and are only due to come into effect in 2015. So, before we all start planning a holiday to the Bahamas with the savings, what are the main facts?
- The relief is limited to £1,200 per annum per child;
- It applies to working families where both parent are not additional rate taxpayers (income over £150,000);
- The relief will be in the form of a ‘top up’ payment – for every 80p spent, the government will provide a further 20p via a special online childcare account;
- HMRC will administer the scheme
As ever, the devil will be in the detail and given the consultation paper is 68 pages long, there’s a lot of detail. However, any help with funding childcare costs has got to be welcome. If you have any thoughts or wish to discuss how you will be affected by these proposals please speak to your normal Hazlewoods contact.
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