Tax free childcare and funding
Tax free childcare and funding Overview
You have been thinking about your child’s future since before they were born. The future is arriving soon and you have to start making decisions that will provide them with confidence and happiness to help shape their life. To help you with preschool fees there is Government funding and tax breaks available.There are four main schemes:
All children become eligible for 15 Hours Universal Funding the term after their third birthday and some families are eligible for Two Year Old Funding. Most families where at least one parent works and pays tax may benefit from Tax Free Childcare.
All funding is paid directly to the preschool and before funding can be claimed we need a copy of your child’s birth certificate and the Parent Funding Contract completed; please ask us for further details of the claiming process.
Term Dates
For funding purposes Term Dates can be a bit different to the Bromley school term dates and the preschool term dates. Terms are deemed to start on the following dates:
| Term | Start date |
|---|---|
| Autumn Term | 1st September |
| Spring Term | 1st January |
| Summer Term | 1st April |
For example, if your child has their third birthday on 31st December then you can claim 15 hours universal funding from the Spring Term onwards however if your child was born on the 1st January your funding claim would start from the Summer Term onwards.
Summary info sheet
Download the Tax free childcare and funding info sheet. This is an A4 PDF with a summary of the information in the article for you to keep and print.
2 Year Old Funding
Government funded early years education for 2 year old children is available under specific circumstances explained in this web page:
www.gov.uk/help-with-childcare-costs/free-childcare-2-year-olds
How 2 year old funding works
You get a maximum of 570 hours funding until your child is old enough to receive 15 Hours Universal Funding. This is the equivalent of 15 hours a week for 38 weeks of the academic year.
How to apply for 2 year old funding
You should apply during the term when your child turns two so funding can start the term after their second birthday. Funding is subject to certain criteria and you need to make the application for your child. If eligible you will be given a code to take to the preschool. We will then check the online system we have access to, using the code, and confirm you can receive funding.
There is an eligibility checker on the Bromley Council website: https://www.bromley.gov.uk/info/20/help_with_childcare_costs/796/funded_early_education_and_childcare_for_two_year_olds
15 Hours Universal Funding
The government funding for 3 and 4 year olds is for a maximum of 15 hours a week and given to all children.
More information is available here:
- www.gov.uk/help-with-childcare-costs/free-childcare-and-education-for-2-to-4-year-olds
- https://www.bromley.gov.uk/info/20/help_with_childcare_costs/1129/funded_early_education_and_childcare_for_3_and_4_year_olds
How 15 Hours Funding Works
Funding is 570 hours per year, split over 38 weeks of the school year.
How To Apply For 15 Hours Universal Funding
All children are eligible for this funding, starting the term after their third birthday. You will need to provide us with a copy of your child’s birth certificate and complete the Parent Funding Contract before any funding can be claimed. The preschool then claim this funding from Bromley.
30 Hours Funding
You can receive funding for 30 hours per week if both parents are working and in special circumstances if one parent is working. This funding is for children that are 3 and 4 years old; there are lots of rules for eligibility which can be found here:
www.gov.uk/30-hours-free-childcare
When 30 Hours Funding is granted other benefits, such as tax credits, may stop. You can use this calculator to check if you will be better off: https://www.tax.service.gov.uk/childcare-calc/
More information is available here: https://www.bromley.gov.uk/info/20/help_with_childcare_costs/1129/funded_early_education_and_childcare_for_3_and_4_year_olds
How 30 Hours Funding Works
You will receive an additional 570 hours funding per academic year, split over 38 weeks. Please contact us for details of which sessions are available using 30 hours funding and we will also need your funding code before funding can be allocated to sessions.
How To Apply For 30 Hours Funding
You will need to apply on the government website and from your application you will be told of your eligibility for both the 30 hours funding and Tax-Free Childcare. With this funding you will have to log into your HMRC account every three months to reconfirm your details or your funding code will expire.
You can login here: https://www.gov.uk/sign-in-childcare-account?step-by-step-nav=f517cd57-3c18-4bb9-aa8b-1b907e279bf9
Tax-Free Childcare
If seeing your hard earned money being taxed is frustrating then watching some being given back will bring a smile to your face. The tax-free childcare scheme replaced the former Childcare Voucher scheme in 2018 and with the current scheme the government pays part of your childcare costs. Parents that joined the Childcare Voucher scheme before it was replaced can continue to use it. This scheme can be used to help with payments to Orpington Montessori Preschool. Most families where at least one parent works and pays tax can use this scheme and eligibility rules are listed here:
How Tax-Free Childcare Works
This scheme works by using an online account for each of your children. For every £8 you pay in, the government adds £2 and you can then use this topped up money to pay the preschool. There is a limit of £500 per child per 3 month period, meaning that up to £2000 per year can be claimed. This scheme carries on after preschool until your child is 11 years old, there is no minimum age.
How to apply for Tax-Free Childcare
Tax-Free Childcare uses a joint application with 30 Hours Funding via the Government website. You will need your National Insurance number and your Unique Taxpayer Reference (UTR), if you’re self-employed.
Apply here for Tax-Free Childcare: https://www.gov.uk/apply-for-tax-free-childcare
Video: Tax Free Childcare – Updated for 2020 & COVID-19
This is a 5.36 minutes video by Mathew Showton of Accounting and Tax Academy.
- 0:49 – How does Tax Free Childcare work?
- 2:08 – Who is eligible for Tax Free Childcare?
- 3:29 – Changes to the scheme due to COVID-19
- 4:10 – How to apply for Tax Free Childcare
Reminder sheet
Download the Tax free childcare and funding reminder sheet. This is an A4 PDF with a space for each important event discussed in this article for you to keep and print. Complete the deadline date using your child’s birthday and the information in this article. Then add a sensible target date to make sure tasks, such as checking for eligibility are completed in time. Remember to use the preschool term dates so you know when the preschool is open and give yourself plenty of time to get tasks done.
Age Chart Summary
This table summarises the funding scheme by the age of your child. Note that whilst this table shows the funding for 15 and 30 hours, funding ends the term a child turns 5 years of age. If you delay entry to Primary school until your child is 5 years you may be able to continue receiving funding but please speak to us as soon as possible if this is your intention. Tax-free Childcare continues until your child is 11 years old.
| Age | 2 year old funding | 15 hours funding | 30 hours funding | Tax-free Childcare |
|---|---|---|---|---|
| 0 to 2 | Check eligibility, enrol at preschool | Check eligibility and apply | ||
| 2 to 3 | Receive funding | Enrol at preschool and provide documents | Check eligibility and apply | Receive funding for preschool and Orpington Holiday Club |
| 3 to 4 | None | Receive funding for preschool | Receive funding for preschool | Receive funding for preschool and Orpington Holiday Club |
| 4+ | None, attending Primary school | None, attending Primary school | None, attending Primary school | Can receive funding for Orpington Holiday Club |
Funding Checklist
- Enrol at the preschool
- Check 2 year old funding eligibility
- Start at Rushmore House Montessori Preschool on or after your child’s 2nd birthday
- Submit birth certificate and sign the parental contract to the preschool office so that funding can be claimed
- Check 30 hours and Tax-free childcare funding
- Your Child’s 3rd birthday
- Universal 15 hours, 30 hours, and Tax-free childcare funding starts the term after your child’s 3rd birthday
- If receiving 30 hours funding you must reconfirm your details every 3 months.
Disclaimer
Whilst every effort has been made to ensure the accuracy of the information in this article you should not make any financial or child care decisions without checking the Government and Bromley Council websites to confirm the details are correct.
- UK Government: https://www.gov.uk/find-free-early-education
- Bromley Council: https://www.bromley.gov.uk/info/20/help_with_childcare_costs
Credits
Feature Photo by Brett Garwood on Unsplash
2 year old funding Photo by Tim Cooper on Unsplash
15 hour funding Photo by Corina Rainer on Unsplash
30 hour funding Photo by Johannes W on Unsplash
Tax-free childcare Photo by Nathan Dumlao on Unsplash
