Tax Alert 16th April 2019 –

Tax-Free Childcare + State Pension and Child Benefit

TAX ALERT

A REMINDER TO RE-CONFIRM YOUR CLAIM TO TAX-FREE CHILDCARE

Tax-Free Childcare – quarterly reconfirmation process

Tax-Free Childcare is a government scheme that helps working parents, including the self-employed and company employees, with their childcare costs.

If eligible, claimants could get up to £2,000 per child, per year to spend on qualifying childcare.

RECONFIRM YOUR CLAIM

To continue to get Tax-Free Childcare, parents must check and reconfirm their details with HMRC every three months. Whilst HMRC say they will send a reminder when they need to do this; it is the parent’s responsibility to reconfirm on time.

Reconfirmation is simple and quick to do, but some parents are still failing to complete this process correctly or on time.

REMINDER

This is a reminder to parents to reconfirm their eligibility to ensure that they keep getting Tax-Free Childcare.

  • To reconfirm successfully, claimants need to:
  • click on ‘Reconfirmation’ in your childcare account(s)
  • click on the ‘continue’ button to see ‘Your reconfirmation summary’ (this shows the details you gave when you applied or last reconfirmed)
  • check their details are correct and are expected to remain the same for the next three months
  • read the ‘Declaration’ then click the ‘Accept and send’ button.

Your reconfirmation will be successfully filed when you see the ‘Thank you’ screen.

You will also receive a secure message in your childcare account about their eligibility.

CHECK

You can check your reconfirmation date at any time in your childcare account(s).

DON’T MISS OUT

Make sure that you are not missing out on Tax-Free Childcare.

CLAIM CHILD BENEFIT AND PROTECT YOUR STATE PENSION ENTITLEMENT

Making a claim to Child Benefit can help protect entitlement to the State Pension.

Child Benefit is a universal benefit payable to families as a contribution towards the cost of raising a child or children.

It is paid to a person who is responsible for a child under 16 (or under 20 and in approved education or training).

The weekly rate is £20.70 for the first child and £13.70 for each additional child. In addition to the payments, until the child is 12 years old a Child Benefit award also provides National Insurance Credits to the person who made the claim.

These National Insurance Credits can help protect entitlement to the State Pension.

Only one person can claim Child Benefit for a child.

For couples with one partner not working or paying National Insurance contributions, making the claim in their name will help protect their State Pension.

Even where the working partner claims Child Benefit, there is scope to transfer the National Insurance Credits and change who gets Child Benefit to protect the non-working parents State Pension.

If you receive Child Benefit payments, and you or your partner’s income is over £50,000, you may have to pay the High Income Child Benefit Charge.

The charge increases gradually by 1% for every £100 of income over £50,000.

At £60,000 the charge is equal to 100% of the Child Benefit entitlement.

However, you may claim Child Benefit and choose not to receive the payments, which means you will not have to pay the charge but still receive the associated National Insurance Credits and protect your State Pension.

If you have any queries regarding your tax affairs, contact Paul Southward.

Paul Southward