With summer holidays fast approaching and inflation at a 40-year high, Ross Boyd, Director at consultancy, RB+ Chartered Accountants, is advising parents across Northern Ireland to take advantage of tax-free childcare breaks this summer.
Ross says, “As inflation soars, household budgets across the country are coming under intense pressure. We are all feeling the pinch, with the recent hike in National Insurance, the increase in VAT in the hospitality sector and other tax generating initiatives, as we seek to entertain our children this summer.
“However, many may be unaware that there are tax-free breaks available to parents.
The government’s Tax-Free Childcare scheme offers working families, including those who are self-employed, support towards childcare costs for kids of 11 years old or younger.”
“Tax-free childcare is available for children aged up to 11, or 17 if they have additional needs. For every £8 you pay in, the government adds £2 up to a maximum of £500 every three months, or £1,000 if your child has complex needs. There are also income limits that need to be considered if you earn more than £100,000 or below the National Living Wage.”
There are various eligibility requirements for the scheme, including employment status, income, your child’s age, your circumstances, and your immigration status
Ross continues, “Parents should also be aware that Tax-Free Childcare accounts aren’t only for regular childcare costs. They can also be used to pay for after-school or summer childcare expenses, such as accredited holiday clubs, childminders or sports activities.
“If you are a business owner then Tax-Free Childcare is great news for you as an employer as well as a parent. The scheme can help keep you fully staffed during school breaks, as it helps employees to pay for childcare during work hours.”
A Tax-Free Childcare account can also function as a nest egg, allowing parents to save for times when care is needed most, and money may be short
Ross adds, “You can pay money into your Tax-Free Childcare account whenever you like. This allows you to pay more during some months, and less at other times, building up a balance to use over the summer holidays, for example, when you’ll need more childcare. You could also ask grandparents and other family members to pay in in lieu of birthday presents.”
To find out more about the Tax-Free Childcare scheme, go to: https://www.gov.uk/tax-free-childcare