It’s very well known that childcare is expensive, in fact it’s so expensive that sometimes you’re no better off going to work than staying home with no income. Many of us that have gone back to work aren’t entitled to any help until our little one turns 3, when we’re then able to claim 30 hours* a week free childcare.. which is great! But what about the other 2/2.5 years previous to that?
That said, there is the government’s Tax Free Childcare service (if you’re eligible) the government will contribute £2 for every £8 you put into your account. I’ve spoken about this to a few people and I was surprised that so many people didn’t know it was available! It’s all managed by an easy-to-use online system and despite its initial teething problems, I’ve found it to be a very simple process;
1. Check your eligibility on the gov.uk website and apply for your tax free childcare account.
2. Once approved, transfer money into your account via online banking.
3. The government then ‘top up’ your account using the £2 for every £8 calculation, usually within 24 hours.
4. When you receive your childcare invoice, select your childcare provider from the list in your tax free account and transfer funds directly to them.
5. Make a note of your reference number and advise your childcare provider what the payment reference will be.
There are a few things to note about the service, you can only claim up to a certain ‘top up’ amount every 3 months (approx. £500), so if your fees are particularly high you may not be able to ‘top up’ to the full invoice amount. Also, your childcare provider must be registered with the service and available within the ‘drop down’ list within the system. You cannot withdraw the ‘topped up’ money, it must be paid directly from the tax free account. If you have any problems/questions about this service, I’ve spoken to a few people at the gov.uk childcare team and they have been extremely helpful, they’ve also resolved any issues I’ve had very quickly.
Childcare can be a massive source of stress and a prominent financial burden upon working families, especially those with multiple children in childcare. There is no real incentive for parents to go back to work, aside from personal ambition and a need for income. The Tax Free Childcare scheme definitely helps with the astronomical childcare fees but it doesn’t tackle the heart of the problem. Why are the fees so high and why is there a lack of financial support to those going back to work? By going back to work, you’re paying tax, national insurance, contributing to the economy and supporting the businesses you work for but then you’re penalised with crippling childcare fees. I don’t want to sound too ‘it’s not fair’… but it’s not! I’m really interested to see whether any changes/grants will be made available in the future for working parents.
Useful link: https://www.gov.uk/tax-free-childcare
*30 hours depending on eligibility, check gov.uk website for full details
The Working Mum Project 