Self-Employed Childcare Vouchers

Childcare Voucher Changes: The self-employed, no longer left out in the rain

Self-employed workers are no longer going to be left out when it comes to childcare help from the government. With the introduction of Tax-Free Childcare, or TFC for short, self-employed people are now eligible (subject to a few criteria, of course!) for help with their childcare costs.

This change was initially meant to be rolled out in 2015, but a few legal challenges meant that it was delayed, and delayed, and delayed. But it’s here now – let’s look at what it means for you:

How it works

It’s quite simple really – for every £8 you pay in to the scheme, the government will pay in £2, up to a maximum of £2,000 per child per year (from the government). This amount increases to £4,000 if your child is disabled.

The scheme doesn’t allow you to use all the £2,000 in one go, you have a quarterly (3 monthly) maximum contribution from the government of £500.

It also goes without saying that the childcare provider must meet certain criteria laid out by the government, sadly they can’t just be a grandparent.

Welcome news

As a self-employed person, you were never entitled to childcare vouchers (these were only ever offered by employers), so this change can really help ease the burden of childcare. Even better news is that this can be added on top of the 30 free hours of childcare (if you’re eligible for them).

Eligibility

It’s never going to be as simple as paying £8 and receiving £2 on top – and rightly so. There are criteria that you’ll have to meet before being offered help.

As a self-employed person you have it a little easier to qualify for TFC than an employee – if you’ve started your business within the last 12 months, you don’t have to meet the minimum income threshold of £120 a week. If you’re an existing sole trader, then you will need to have average earnings of £120 per week.

The child you’re claiming TFC for must be living with you most of the time too and they must be under the age of 11, or 17 if they’re disabled.

Drawbacks

Unfortunately, you can’t claim for Tax Credits, Universal Credit, Childcare Vouchers and TFC at the same time.

If you are already claiming Childcare Vouchers

If you’ve got access to Childcare Vouchers, you can still claim them if your employer still offers them but you cannot have both. Check out the government’s calculator to see if you’re better off keeping your current benefits or applying for TFC.

How to apply

If you’re better off claiming for TFC, then you can apply online here.

You’ll just need your NI number, your unique taxpayer reference and about 20 minutes of your time.

We hope you have found the above information useful, but do give us a call on 01926 851516 if you would like to discuss Childcare Vouchers in more detail.