A new scheme of tax-free childcare is scheduled to launch in autumn 2015 and rolled out within a year to all eligible families with children under 12, the government has announced. An earlier version of the set-up had the age limit at four years old.
The subsidy itself has also been increased, meaning parents will receive as much as £2,000 for each child: 20% support on care costs up to £10,000. The maximum amount proposed originally was £1,200.
The system – operated by HMRC in partnership with National Savings and Investments – will be managed through online accounts, with assisted approaches available for those who cannot access the internet.
Parents will be able to open a childcare account, pay in money when they want to, and receive government top-ups and spend on qualifying childcare as they wish.