GBP1 200 Tax Relief on Child Care Costs

£1,200 Tax Relief on Child Care Costs.

In an effort to make it easier for people to return to work and afford child care, the Government has confirmed it will launch a new relief to assist with child care costs.

In short, up to £1,200 could be reclaimed against the costs of care.

How does it work?

• Available for children up to the age of 5

• Child care fees capped at £6,000

• Tax relief granted at 20%.

• 20% X £6,000 = £1,200

Our view

The government message is clear and simple “it pays to work”. The Government has confirmed that it will introduce the scheme from 2015 and eventually the scheme will expand to those that need after school care or other school holiday care to help families with children up to the age of 12.

This is great news. As ever, other political parties are saying it is not enough, but what did they offer? The failed “Child Trust Fund” – free money with no incentives. This move, whatever anyone’s politics are, is good to help people who are desperate to return to work.