We often touch upon the subject of when choosing the life of a self-employed contractor it comes with its own amount of considerations that do not necessarily apply to that of the life of a ‘permie’.
One such consideration is child care. Currently persons in full time employment can benefit from a government scheme involving childcare vouchers. This scheme is only available via employers and therefore self-employed persons unless they are directors of their own limited company and prepared to set up their own voucher system are excluded from this.
From early 2017 this is set to change. The government has proposed its new ‘Tax Free Childcare Scheme’ which does not exclude the self-employed.
This will allow individual accounts into which a balance can be built up on a flexible as and when basis, which the government will then top up with another 20% towards childcare costs up to a total of £10,000.
The following criteria applies:-
Available for children up to the age of twelve, or in the case of disability up to seventeen
Both parents need to be working and earning £115 each per week and no more than £100,000 each per year, although there is a ‘start-up’ period which applies to newly self-employed whereby they won’t have to meet the minimum earning level
Child care must be by a registered provider
Parents will need to re-confirm their circumstances every three months via the online system
The scheme is not limited whereby only the parents may contribute to the account meaning employers and even family members may also add to this. In addition the scheme offers the ability to access the money in the account excluding the government contributions, which would be extremely useful in the event of a change of circumstances or indeed cash flow problems.
Contractors who have previously struggled at times with child care costs and begrudged the availability of child care assistance to permanent employees will welcome these proposals.