Any working parent will tell of the challenging cost of childcare. Some parents are spending almost twice as much on part-time childcare per annum as they are on food and drink. For many, these costs are prohibitive and parents are forced to reduce their working hours to manage these costs.
Fortunately, the Government has recognised the huge impact of this issue and announced changes in the recent budget, which could save families thousands of pounds in childcare fees each year.
So, from April 2017 tax changes are coming in – what will these changes mean to your childcare costs?
Child Tax Credits
The “family element” of child tax credits is to be abolished for parents of children born after 6th April 2017.
Furthermore, the “child element” will only apply to the first two children (however, in respect of children born prior to this date, credits for three or more children will still be payable).
Tax-free childcare is to be introduced to replace employer-supported childcare (including childcare vouchers).
It will be available to approximately 2 million working families with children under 12., for people who have an annual income of less than £150,000 (and are not receiving help with childcare via tax credits).
The government will contribute up to 20% of the first £10,000 of childcare costs per annum (to a maximum of £2,000 per child, per year). To find out how to apply, read here.
Obviously, this funding can go towards breakfast clubs, after school clubs and holiday camps, such as those we provide through Kidz Zone.
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