All you need to know about Tax-Free Childcare (TFC)

We’ve been updating you on Tax-Free Childcare (TFC) for the past few months.

From 24 November 2017, parents whose youngest child is under 6 (or who has their 6th birthday on that day) can apply for TFC through the governments’ Childcare Choices website.

Over the coming months TFC will open to parents of older children (up to 12 years old only) and government has also promised to make further improvements to the online application system, which has seen some issues.

To help parents understand everything there is to know about TFC, we’ve created a dedicated website, Give Yourself a Choice with lots of information and tools:

Video – TFC: What’s it all about?

Decision Tree – TFC vs. childcare vouchers

Parent interviews

o Are you a couple where one of you works and the other doesn’t?

o Both in work with high childcare costs?

o Not using childcare vouchers at the moment?

o Do you and your partner both pay Basic rate tax?

o Do you have a child with a disability?

o Are you or your partner self-employers?

o Do you work part-time?

o Single parent relying heavily on childcare?

› FAQs

› Fact Sheet

For more information about childcare vouchers visit www.computersharevoucherservices.com

Christmas opening hours

On behalf of everyone at Computershare, we'd like to wish you a very merry Christmas.

Our customer service team will be available to answer your childcare voucher queries at the following times over the festive period:

Friday 22 December 8.00am - 6.30pm

Monday 25 December Closed

Tuesday 26 December Closed

Wednesday 27 December 9.00am – 4.00pm

Thursday 28 December 9.00am – 4.00pm

Friday 29 December 9.00am – 4.00pm

Monday 1 January Closed

Tuesday 2 January 8.00am - 6.30pm

Clarity on the Government’s response to the Childcare Voucher petition

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It has been said that Tax-Free Childcare (TFC) is fairer and better targeted than vouchers, but this doesn’t take into account that families would lose all support under TFC if one parent was not in work for any reason—this could be an unexpected job loss or having to stop working to look after an elderly relative. With childcare vouchers, the family would still receive support where they wouldn’t with TFC via the other working parent. If the childcare vouchers scheme closes to new entrants as planned, then even existing users would lose access if they ever changed employer.

The average family will be able to claim more support with childcare vouchers. TFC is often said to offer £2,000 of support, but this is based on a family spending a total of £10,000 a year on childcare, with £8,000 out of their own pocket. Most families cannot afford this. In fact, according to the Government’s figures, the average family spends £3,276 on childcare each year. This family would only receive up to £655 of support under TFC but could receive up to £1,866 with childcare vouchers.

It is also important to acknowledge that anyone who claimed TFC would lose access to any other working tax credits and universal credit, and these other benefits would still be available to a family using childcare vouchers.

It is also sometimes claimed that TFC is “fairer” to single parents, but single parent households could still be worse off with TFC. A basic rate taxpayer single parent would have to spend over £4,665 on childcare to be better off with TFC than with childcare vouchers. It is precisely instances like this that shows us the importance of keeping both schemes open.

People sometimes think childcare vouchers has restricted access, but the fact that you are receiving this email means that you are probably one of the well over 20 million employees of the 31 million in this country that can access vouchers. This includes everyone who works for any public sector body and any large employer. And this number is growing by the day. Even with the threat of closure over 1,000 new small and medium sized businesses sign up to join the childcare voucher scheme every month.

Hopefully you’ll be able to see why we think it is so important that we keep childcare vouchers open.

30 hours free childcare – reconfirming your eligibility

Did you successfully apply for the autumn term this September? Then you were one of over 200,000 eligibility codes issued for children who were aged three by 31 August 2017. However - only 71% of these were validated by early September.

You’ll need to reconfirm your eligibility every 3 months in order to continue to receive your extra hours. See the ‘Reconfirming your eligibility’ section later in this blog for more information.

Applying for 30 hours free childcare for the first time - upcoming application deadlines

Parents can apply and have their eligibility checked for 30 hours free childcare via the Childcare Service . If you plan to apply for 30 hours free childcare in the next few months, here are some things you need to know:

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And here are the application deadlines for your diary:

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What happens after you’ve applied?

If you’re eligible, you’ll be given a 30 hours eligibility code. Take this 11-digit code, along with your National Insurance number and your child’s date of birth, to your chosen childcare provider.

The provider will use the Department for Education’s Eligibility Checking System (ECS) to confirm the validity of the code either directly, or via their Local Authority. Once the 30 hours code has been validated via the ECS, you’ll be able to take up your 30 hours place.

 

Reconfirming your eligibility

You should be prompted every 3 months to reconfirm your eligibility through your childcare account and amend any details if necessary, or just press ‘reconfirm’ if nothing has changed.

You may also need to reconfirm your place with your childcare provider each term.

 

What if I’m no longer eligible?

On reconfirmation, if you’re no longer eligible for 30 hours you’ll enter a grace period where you can still retain your childcare for a short period of time.

›      A child who becomes ineligible during the first half of a funding block should be funded until the end of that funding block.

›      A child who becomes ineligible in the latter half of the funding block should be funded until the end of the following funding block.

 

For more information: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/642828/30_hours_free_childcare_eligibility_codes_issued_and_validated.pdf

* 30 hours free childcare applies to England only.

Tax-Free Childcare opens to children under 6 years old

When Tax-Free Childcare (TFC) first launched it was only offered to parents of children who were under 4 years of age on 31 August 2017.

From 24 November 2017, parents whose youngest child is under 6 (or who has their 6th birthday on that day) can also apply for TFC through the governments’ Childcare Choices website.

Over the coming months TFC will open to parents of older children (up to 12 years old only) and government has also promised to make further improvements to the online application system, which has seen some issues.

This means almost all parents should receive a response within five working days, and most get their decision instantly.

If you’re not sure whether you’d be better off with TFC or childcare vouchers, take our interactive Decision Tree and find out.

How to apply for 15/30 hours free childcare

The Free Early Education Entitlement currently offers 15 hours of early education for 38 weeks each year. This is available to all three- and four-year-old children and the most disadvantaged two-year-olds in England.

This universal offer for three- and four-year-olds was extended to 30 hours for children of working parents in September 2017.

While the universal entitlement is focused on supporting child development, the government aim of this extension is that “Additional free childcare will help families by reducing the cost of childcare and will support parents into work or to work more hours should they wish to do so”.

Apply by 31 December to get a code to use for the term starting in January.

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  • Tax-Free Childcare (TFC) and 15/30 hours free childcare are two separate government schemes, but they use the same online application process
  • You can apply for 15/30 hours free childcare and apply for/continue to receive childcare vouchers through your employer
  • You don’t have to apply for TFC to be eligible for the 15/30 hours free childcare
  • You can’t receive both TFC and childcare vouchers within your family
  • Analysis by Employers for Childcare shows that the majority of working families will be better off with childcare vouchers, tax credits or a combination of both, rather than TFC

* The first 15 hours of free childcare is available to all families. The additional 15 hours (to make 30 in total) is only available to working families who each earn between £6,240 and £100,000 a year.

Check what help you could get with your childcare costs, and which support might be best for you, using the childcare calculator.

Find out more about similar schemes in Scotland - external linkWales - external link / Cymru - external link, and Northern Ireland.

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For families in England, receiving some forms of supportWith 2-year-old children15 hours of free childcare or early education a week.png