SOCIAL SECURITY BENEFITS/PENSIONS – STATE BENEFITS

Synopsis: HMRC has published draft regulations concerning eligibility for tax-free child care and how the scheme is intended to operate. The regulations are subject to technical consultation which runs until 3 October 2014.

Date posted: Tuesday, July 15, 2014

The 2013 Budget announced the introduction of a new scheme, referred to as ‘tax-free childcare.’ The scheme is designed to provide financial support to help working families with the cost of childcare and it aims to support parents to take up paid work, or increase their existing working hours, if wanted, and is intended to come in from autumn 2015.

At the time tax-free childcare was first introduced, Government support was to be £6,000 (i.e. providing basic rate tax relief up to £1,200), however, the 2014 Budget confirmed that the amount would be increased to £10,000 (i.e. providing basic rate tax relief up to £2,000).

HMRC has published two draft statutory instruments (together with commentary) for external technical consultation. The first statutory instrument contains the detailed rules concerning eligibility for the scheme, and the second contains the detailed rules on the operation of the scheme – interested parties have until 3 October 2014 to comment on the draft regulations.

Details of the draft regulations together with how to comment on them can be found here:

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