The Government wants to help working families and currently if you are an employee your employer can help with childcare and could for example buy childcare vouchers of up to £55 per week, the vouchers would be a tax free benefit to the employee. However, if you’re self employed you aren’t an employee so the rules don’t apply.
So recently there has been a consultation on what should be be done in the future.
The key proposals are:
- New Scheme to go live in Autumn 2015
- Working Families will open Voucher Accounts (self employed or employed)
- As parents pay in the government tops up the account with 20p for every 80p paid in
- Top up capped at £1,200
- To be eligible all parent must work and not receive tax credits or be an additional rate tax payer
The chart below shows how it should work:
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