This article looks at what childcare vouchers are, and how they can support parents/guardians with childcare costs.
With the ever-rising cost of living, and the financial uncertainty we are all currently facing, there are a number of schemes to help parents and guardians with the costs of childcare. Childcare Vouchers are a simple, straightforward way to pay for quality childcare that saves you money. That’s because you don’t pay tax or National Insurance on childcare vouchers up to specified limits – so working parents can save up to £2,000 a year.
The most common scheme is the governments tax-free childcare scheme.
For those of you who are not aware already – If you’re a single parent, or if you and your partner both work a minimum of 16 hours a week and earn more than the National Living wage, then you qualify for the governments tax-free childcare scheme.
What is Tax-Free childcare and how does it work?
Tax-free Childcare is a government initiative designed to help working parents with the cost of childcare.
You open an online account with the government (through the government website) which you can pay into to cover the cost of childcare with a registered provider. For every £8 you pay in, the government will top up an extra £2 for you to pay your childcare provider.
You can get up to £500 every 3 months (up to £2,000 a year) for each of your children to help with the costs of childcare. This goes up to £1,000 every 3 months if a child is disabled (up to £4,000 a year).
How can I apply for Tax-Free childcare funding?
If you’re eligible, the application take around 20 minutes top complete. All you need is your details (and your partner’s, if applicable), including your:
- National Insurance number
- Unique Taxpayer Reference (UTR) if you’re self-employed
During this application process, you’ll discover whether you’re eligible for Tax-Free Childcare. If you live in England, you’ll also find out whether you’re eligible for 30 hours free childcare. It’s possible that you’ll find out straight away, but it can take up to a week.
For more information and to start saving on all the great activities ActiveMe 360 has to offer, visit: Tax-Free Childcare – GOV.UK (www.gov.uk)
What about childcare vouchers – Can I still use them?
Childcare vouchers, as well as directly contracted childcare (childcare your employer arranges with a provider, such as salary sacrifice) have been discontinued by the government.
However, if you joined either one of these schemes on or before 4 October 2018, you’ll still be able to receive these vouchers and use them to support your childcare payments.
These two types of childcare funding have since been replaced by the tax-free childcare scheme highlighted above.
IMPORTANT: If you do decide to apply for tax-free childcare, you will no longer receive any of the above-mentioned schemes’ funding and you won’t be able to go back to using them. If you’re unsure on whether or not you should stick to childcare voucher or apply for tax-free childcare funding, here is a useful calculator to help you decide.
Whether you receive childcare vouchers or have access to the tax-free childcare funding, you can start booking on to our holiday camps by visiting our booking site.