Were you pleased to see the new approach on childcare tax relief?
I was delighted back in 2013 to see that the Budget went some way to addressing concerns over the cost of childcare. As a mum of twins I am only too familiar with the high costs of childcare, particularly when compared with the amount of money I can realistically earn in the same period of time. For a long time the government’s stance has been that it is not a valid business expense – even though I simply can’t attend the majority of client meetings with my children in tow.
Despite the long delay, the new tax-free childcare accounts are finally here, and it means that working parents will be able to get 20% towards their childcare costs (up to £2000 a year for each child). In order to qualify both parents need to work, and neither can earn more than £100,000 a year. The scheme only applies if your child is under the age of 12, or 17 if they are registered as having a disability.
If you need some help with childcare costs then you can also check and see if your employer has a childcare voucher scheme. If you own your own small limited company you can set up such a scheme quickly and easily and see some immediate tax savings. Your accountant should be able to advise you on what to do.
Its great to see some acknowledgement of how much of a problem this is for working parents across the country, but as ever things are more complicated than they appear on the surface. If you have the option of either childcare vouchers or the new tax-free childcare accounts then deciding which one to opt for is far from a straight-forward decision. We can help you to work out which option is best in your circumstances – why not get in touch.