Paul Blakeley, childcare provider liaison for HMRC’s Tax-Free Childcare programme gives an update on this new government scheme and how parents and providers can benefit.
Following the launch of the government’s new Tax-Free Childcare scheme, this blog is here to help you understand what it’s all about. Specifically, what the scheme can offer to you and your parents, and how you can sign up.
What is Tax-Free Childcare?
In a nutshell, Tax-Free Childcare is there to support working parents with the cost of childcare. For every £8 a parent pays into their childcare account, the government adds an extra £2, up to a maximum of £2,000 per child per year (or £4,000 for a disabled child).
Parents with a child born on or after 1 April 2013 can now apply, and all eligible parents will be able to apply for Tax-Free Childcare by the end of the year.
Parents with more than one eligible child only need to sign up once – at the point their youngest child becomes eligible – and can apply for all of their other children under 12 at the same time.
Sign up to Tax-Free Childcare today
Parents can only pay you through their childcare account if you have also signed up to Tax-Free Childcare. Signing up only takes a few minutes and over 45,000 providers from across the UK have already done so.
Sign up today at: www.childcare-support.tax.service.gov.uk
You only need to sign up once. Parents will then be able to see that they can pay you using Tax-Free Childcare.
We know that some parents and providers have experienced difficulties accessing the childcare service. We are sorry for the inconvenience this has caused and are working hard to fix these issues. We’ve made a number of significant improvements to the service and thousands of parents are now applying successfully every single day.
However, if you or your parents are experiencing difficulties or need technical support, please phone the childcare service helpline on 0300 123 4097. The helpline is open 8am-8pm Monday to Friday; 8am-4pm on Saturdays and 10am-4pm on Sundays and bank holidays.
What do I need to sign up?
If you are a registered or approved provider, you should already have received a letter from the government inviting you to sign up to Tax-Free Childcare.
To sign up, you will need:
- your user ID and the setting postcode held by your regulator - you should have received your user ID in your original invitation letter
- the details of the bank account you want childcare payments to be made into - once you have signed up, parents will then be able to send payments directly from their Tax-Free Childcare accounts to your bank account via BACS
- the 10 digit Unique Taxpayer Reference (UTR) and postcode for your business, as held by HMRC (this may be different to the postcode for your setting) - you can find your UTR on any HMRC communications, for example, your tax statement or payment reminder, or by logging onto your Personal Tax Account
- your National Insurance number, if you’re a nanny/employed childcare provider
If you don’t know your User ID or your UTR, you can call our helpline on 0300 123 4097.
What’s the difference between Tax-Free Childcare and 30 hours?
Parents apply for both Tax-Free Childcare and 30 hours through the new online childcare service. However, the two schemes operate independently. Further information on both schemes, as well as other government childcare support, is available on the Childcare Choices website.
Eligible parents can use both Tax-Free Childcare and 30 hours together to support their childcare costs. As a provider, you can choose to accept Tax-Free Childcare payments and offer 30 hours places.
But while you don’t need to sign up to offer 30 hours, you do need to sign up to receive payments from parents’ Tax-Free Childcare accounts.
What else do I need to know?
The Childcare Choices website has a page dedicated to childcare providers, which includes a toolkit full of materials to help you communicate Tax-Free Childcare and 30 hours to your parents.
We’ve also brought together answers to some frequently asked questions below, and further information is available on our childcare provider guidance page.