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UK Announces Tax-Free Childcare Allowance

by Jason Gorringe, Tax-News.com, London

15 February 2018


IPSE, the Association of Independent Professionals and the Self Employed, has welcomed the UK tax authority's announcement that all working parents – including the self-employed – can now receive a tax-free childcare allowance.

The GBP2,000 (USD2,800) allowance is available to all working parents with children under 12, and who are earning the minimum or living wage. HMRC also announced that the earnings limit would not apply for self-employed people who started their business in the last 12 months.

Jordan Marshall, IPSE's Policy Development Manager, commented: "This is excellent news for the self-employed, and particularly for the growing number of self-employed women, who continue to be responsible for the majority of domestic childcare in the UK."

"In 2013, women reported doing 23 hours of domestic childcare each week, compared with 10 hours for men. And as the number of women working for themselves grows (they now make up 43 percent of the UK's 1.9 million highly skilled freelancers), balancing running a business and childcare will become a problem for more and more people."

"This announcement represents a significant step in the right direction in the Government's approach to self-employed parents and particularly mothers."

"The next step now should be to do the same for parental leave pay: giving self-employed mothers and fathers access to maternity and paternity pay and shared parental leave. Freelancers and the self-employed contribute an enormous amount to the UK economy, and when it comes to starting a family, they should be given just as much help and support as their employee counterparts."

TAGS: tax | business | United Kingdom | tax authority | individual income tax | Professionals

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