Tax-free childcare: the basics (Taxation)

Taxation100414MPs debated childcare provision last night. A new clause to the Finance Bill, tabled by Labour, would have required the government to review before April 2015 “ways in which changes to the tax and childcare systems could be used to increase the affordability of childcare”. The clause was defeated but what I saw of the debate was interesting. It’s a pity that only a dozen or so MPs attended.

This week’s issue of Taxation includes my article setting out the basics of tax-free childcare, as announced the day before last month’s Budget. It reads:

Parents welcome tax-free childcare and want it to be rolled out as quickly as possible, according to the response document to the August 2013 consultation on the new arrangement.

Respondents said the scheme, announced in the 2013 budget, must be simple to operate and responsive to changing childcare needs. The government promised continued engagement with “all interested parties” to ensure that it gets the design right.

HM Treasury said that self-employed parents and those working for firms that do not offer the existing employer-supported childcare will have access to support with childcare costs for the first time as will all working families in which no parent is an additional rate taxpayer.

Read more at Taxation (subscription only).