“I can’t run my business unless I have childcare – I must be able to claim it against my business?” is something I hear all the time – but at the moment if you are self-employed, childcare is not a tax deductible expense.
Agreed – totally unfair, as it can be so expensive, sometimes you wonder if its worth working!
If you are an employee, or have a limited company then childcare vouchers exist and you can use these to get some tax savings.
For the self-employed you will have to wait until 2017 when the new childcare tax relief will be rolled out.
Once launched, working parents will be able to get 20% towards their childcare costs (up to £2,000 a year for each child up to the age of 12). In order to qualify both parents need to work, and neither can earn more than £100,000 a year. There is a minimum you need to earn to qualify as well, but HMRC say there will be “start up period” for newly self employed parents whose income may be very low initially.
Parents will set up an online account for childcare, and for every £80 the parents put in HMRC will “top up” with £20, to the maximum of £10,000 per year. You wont be able to claim tax-fee childcare on top of tax credits, universal credits or existing childcare vouchers.
So there is some help on the way – but in the meantime for many working Mums, we will need to continue to rely on extended family, friends, and CBBC!
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