We could all use a little help right now. Luckily, the government has made some short-term adjustments to the Tax-Free Childcare (TFC) scheme. In an effort to help more people with extra expenses due to coronavirus get access to tax-free child childcare (TFC), the government has made some temporary changes to the scheme.
This does not constitute advice and advice should be sought in all instances before acting on it. The Financial Conduct Authority does not regulate tax advice.
Tax-Free Childcare refresher
Every 3 months, you can get up to £500 (up to £2,000 a year) per child to help with childcare costs. If your child is disabled, relief is doubled. You can use this money for a nanny, a nursery, or any childminder registered to the scheme. Even after school clubs might be an option for older children.
Who could benefit?
Most notably in the temporary changes is that critical workers who have earned more than the £100,000 limit due to overtime worked during the pandemic now quality for TFC. And if any critical workers missed the deadline earlier this year, they can still apply.
If you’ve been furloughed or haven’t been able to work as much as you usually do, you could still qualify because your normal income will still apply. Additionally, if you’re working more than usual because of the pandemic or are a critical worker or self-employed, you could also benefit.
- Your expected earnings must be at least equal to the national minimum wage or living wage over the next 3 months. For someone older than 25, this would equate to £1,813.76 per month.
- This also applies to your spouse or partner.
- The newly self-employed can use their expected year’s earnings if they’re not currently at this level.
You won’t qualify if you or your spouse/partner’s adjusted income will be over £100,000 this tax year (apart from critical workers).
Get access to help now
If you think you might now be eligible for tax-free childcare or have questions about TFC, reach out to your financial adviser. We’re happy to answer any questions you might have about this or any other government scheme designed to help you financially. Get in touch today.
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