Tax-free saving for childcare
Helping with the cost of caring for a young family
Benefit from the government scheme to help you manage the cost of childcare. Under this scheme, you open an online account to pay for registered childcare. For every £8 you pay into the account, the government will add an extra £2 – effectively a tax rebate. You can receive up to £2,000 for each child each year or £4,000 if your child is disabled.
The scheme is available for paying childcare for children from birth to age 11 (or 16, if the child is disabled). To be eligible for the scheme, you and your partner must each expect to earn at least £120 a week but under £100,000 a year. You are not allowed use the scheme at the same time as you are using childcare vouchers, Universal Credit for childcare or tax credits for childcare.
Don’t forget to check the free childcare schemes the government provides – there are different schemes in England, Scotland, Wales and Northern Ireland.
Note: you can find out how to register and when you may be eligible by going to www.childcarechoices.gov.uk
If you are currently using childcare vouchers, please make sure you read all the information before deciding if this scheme is right for you. Once you leave the childcare voucher scheme you can’t rejoin it.
To help you decide, the government has created a calculator to show you how much help you could get. You can find it here: www.gov.uk/childcare-calculator.
At a glance
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Tax savings
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Employee funded
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Flexible benefit
Tax savings
The money you pay for some benefits (such as your pension) is taken from your salary before tax and National Insurance are deducted. This means you don’t pay any tax on the money you use to fund these benefits. For some other benefits (such as tax-free saving for childcare) the tax is added back on to your contribution when the benefit is provided.
Employee funded (EE)
A benefit which you choose to join at an additional cost to you.
Employer funded (EF)
A benefit that is funded by the Company, at no cost to you.
Limited time benefit
You can only sign up to limited time benefits during March, or within three weeks of joining SAP.
Flexible benefit
You can sign up for flexible benefits at any point during the year. Be aware that you can’t always make changes to these benefits at any time during the year, so check on the conditions when you sign up.
