How to Budget For a Nanny

You don’t have to be on a low income to get help with childcare costs.

Help with child care is available from many employers and from the government, but only for registered childcare providers. (Ofsted Registered)

Childcare vouchers

An employer can provide vouchers that can be used towards the cost of childcare. You can choose your own childcare provider, as long as they are registered or approved.

You can receive up to the following amounts in childcare vouchers monthly without having to pay tax or National Insurance on them.

• £243 a month if you’re a basic-rate taxpayer
• £124 a month if you’re a higher-rate taxpayer
• £110 a month if you are an additional-rate taxpayer and you joined the childcare scheme on or after 6 April 2011

Direct payment for childcare

This is much the same as the childcare voucher system, except your employer pays the registered or approved childcare provider directly.

New childcare scheme from 2015

There’s a new tax-free childcare scheme due to be introduced from autumn 2015. Under this system, you’ll get 20% of your yearly childcare bill paid for by government.

• You open an online account through GOV.UK and pay into it to cover your childcare costs
• The government then tops up your account with a 20% contribution (the same as the basic rate of tax), up to a maximum contribution of £2,000 a year per child

It is going to be available to families of under 12s where both parents are working (and working single parents) who are not already claiming tax credits to help with childcare costs.