I hope you all had a great summer whether you were working during it or taking time off with your family.
I started my business because I wanted to have the flexibility of being able to spend time with my children and have a working life. I hugely enjoy both and being selfish, I did not want to miss out on either. As much as I love my children’s company there are times when I need to use childcare in order to achieve certain things that need to be done (both work and family life). This is why this month I have decided to write my blog about childcare costs and tax free childcare.
So what is currently available for self employed individuals? Employer childcare vouchers are not an option for sole traders but there is the childcare element of the Working Tax Credit. This can be worth up to £122.50 a week for one child or up to £210 for two or more children. There are qualification rules for this which include:
– having a child/children under the age of 16;
– being over 16 yourself;
– a couple must be working at least 24 hours a week (with one parent working at least 16 hours a week);
– a single parent must be working at least 16 hours a week.
The below link will be able to calculate whether you are eligible for childcare tax credits
In Autumn 2015 the Government will be introducing a new Tax-Free Childcare scheme which, if you qualify, will provide 20p to every 80p you pay in to the scheme. This is up to a maximum of £10,000 or equivalent to £2,000 per child per year. To qualify your children must be under 12 and both parents (and working single parents) must be earning at least £50 per week and no more than £150,000 per year. The main benefit for the self employed here is it is not an employer based scheme and self employed people can also qualify. More information is likely to become available as we get closer to launch date.
Some useful links for both the Tax-Free Childcare scheme and the childcare element of the Working Tax Credit can be found below.
As always if you have any queries about this or any other accounting issues or want any further information do feel free to contact me :
or visit my website
Next month I will be looking at Self Assessment as it gets towards another tax years deadline.
Have a great month.