The Queen has confirmed that the government’s new tax-free childcare scheme, first announced in the 2013 Budget, will take effect from autumn 2015.
The Childcare Payments Bill will introduce the new tax-free childcare scheme to support working parents by giving support equivalent to basic-rate tax relief on money spent on childcare, up to a maximum of £2,000 per year for each child.
The main benefits of the Bill would:
- Enable parents to go out to work if they want to and provide security for their families.
- Extend existing government support for childcare costs to self-employed parents and to parents working for the 95% of organisations that do not currently offer employer-supported childcare.
- Build on the £5 billion per year the government already spends on early education and childcare, including expanding support for those on low incomes by increasing to 85% the proportion of childcare costs that those on Universal Credit can claim back, even those working just a few hours; extending the offer of free nursery care for three and four year olds to 15 hours a week; and introducing free nursery care for the most disadvantaged two-year olds.
Read more about the new tax-free childcare scheme.