A new survey has revealed that a third of working parents are unaware that the government-backed Tax-Free Childcare scheme exists.
Despite being launched in April 2017 to replace Childcare Vouchers, which were closed to new applicants last October, many working parents are struggling to balance childcare costs with office hours, with 96% stating that childcare costs are too high.
The survey, which was carried out by Perrys Chartered Accountants to raise awareness of the tax benefits that working parents might be missing out on, also revealed that 84% of part-time workers with children would consider working longer hours if costs for childcare were cheaper.
Childcare costs are notoriously high in the UK, with the average charge for sending a child under two to nursery equating to £127 per week for 25 hours (part-time). As a proportion of a family’s net income, on average 33% of outgoings will go towards paying for childcare. This is up to 29% higher compared with other countries in Europe. The UK’s Tax-Free Childcare scheme allows parents to get up to £2,000 per child, per year to help cover childcare costs.
Declan McCusker, who is a Partner at Perrys’ Mayfair office, said:
“Despite the introduction of Tax-Free Childcare it seems many parents are missing out. This is a concern, particularly when the majority of working parents find it difficult to pay for childcare during school holidays, when costs per child can more than double.”
Kate Clifford is a part-time working parent with three children. She said:
“Since I returned to employment, my husband and I haven’t taken time off together. We share our annual leave in order to reduce the costs of childcare during the school holidays. It can be incredibly expensive with three children attending a club daily during a five-day week. Fortunately, the company I work for is flexible and allows me to work my hours around childcare arrangements to help me to minimise costs. However, not every working parent has this option. It’s hard balancing parenting and working hours, and it becomes even more difficult when childcare costs are so high.”
“I’d recommend parents review their options. They might be eligible for certain benefits to help cover the costs of childcare, including Tax-Free Childcare, which they either don’t know about or think they can’t claim.”