Childcare schemes

The government has introduced a new Tax-Free Childcare (TFC) scheme, which operates via an online childcare account. Existing Employer-Supported Childcare (ESC) was set to be closed to new entrants from 6 April 2018, with existing recipients being able to choose to remain in the scheme for as long as their employer continued to provide it, or move to the new TFC scheme. However, the April deadline has subsequently been extended by a minimum additional six months. ESC, such as childcare vouchers, may be offered in addition to employees’ pay or as a reduction in pay (commonly known as salary sacrifice), enabling them to reduce the cost of childcare. Under the new TFC scheme, relief is given at 20% of the costs of childcare up to a total of childcare cost of £10,000 per child per year. The scheme is worth a maximum of £2,000 per child (£4,000 for a disabled child). All children under 12 years old are eligible (or up to 17 for children with disabilities), but parents must meet certain eligibility criteria. The government has introduced a new Tax-Free Childcare (TFC) scheme, which operates via an online childcare account. Existing Employer-Supported Childcare (ESC) was set to be closed to new entrants from 6 April 2018, with existing recipients being able to choose to remain in the scheme for as long as their employer continued to provide it, or move to the new TFC scheme. However, the April deadline has subsequently been extended by a minimum additional six months. ESC, such as childcare vouchers, may be offered in addition to employees’ pay or as a reduction in pay (commonly known as salary sacrifice), enabling them to reduce the cost of childcare.Under the new TFC scheme, relief is given at 20% of the costs of childcare up to a total of childcare cost of £10,000 per child per year. The scheme is worth a maximum of £2,000 per child (£4,000 for a disabled child). All children under 12 years old are eligible (or up to 17 for children with disabilities), but parents must meet certain eligibility criteria.

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