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Tax-free childcare scheme amendments

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The Childcare Payments (Eligibility) (Amendment) Regulations, SI 2016/793, which come into force on 5 September 2016, reduce the upper income limit from £150,000 to £100,000 per parent to be eligible for tax-free childcare. They also increase the minimum income parents must earn per week to be eligible for top-up payments from eight to 16 hours at the national minimum wage or national living wage rate. These changes were announced at Autumn Statement 2015. The regulations also replace the definition of ‘hypothetical net income’ with a definition of ‘adjusted net income’, and create the term ‘hypothetical adjusted net income’ to refer to the income of persons not domiciled in the UK.

The Childcare Payments (Amendment) Regulations, SI 2016/796, which come into force on 5 September 2016, disallow pro-rating in cases of late declaration except for universal credit or tax credit claimants; extend account restriction orders to universal credit or tax credit claimants; add an additional circumstance that would give rise to a compensatory payment for parents unable to open an account and provide for customers that are unable to assure their identity online owing to serious technical failures; and remove the requirement for parents to provide a child benefit number. They also require self-employed individuals, upon reconfirming their eligibility for the scheme, to provide their unique taxpayer reference, also applying to partners who are self-employed in another EEA state. The definition of ‘personal independence payment’ is amended to include a reference to the Northern Ireland legislation.

Issue: 1319
Categories: News