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News - 24 March 2014

Free childcare allowance to rise.

In a scheme, first announced last year, as many as 1.9 million working families could benefit from a tax-free childcare allowance worth up to £2,000 per child from 2015-6.

According to the Family and Childcare Trust, the average nursery cost for a child under two rose by 4.2% last year to £106.38 per week for a part-time place (25 hours) while a full-time place costs £11,000 for a year.

Tonmoy Kumar, Manager of the Accounts Department of ABDS comments:
“As it stands at the moment, employees of participating companies can reduce their childcare costs through a tax-free voucher scheme, although only about 5% of UK employers and 450,000 families are signed up to it.”

When it was originally announced a year ago, ministers said the maximum support available would be £1,200 per child and that it would be phased in over seven years, with only children under five eligible for assistance with costs in the first year.

Following a public consultation, ministers have agreed to significantly increase the value of the scheme, up to a maximum of £2,000 per child, and accelerate its implementation, extending it to all children under the age of 12 within the first year.

The government is also announcing a £50m cash boost for early years education, aimed at helping three and four year olds from the most disadvantaged backgrounds.

The money will be available to nurseries, schools and other providers of free education in England to improve their overall provision, including recruiting staff and supporting specialist speech and language services.

Under the government's proposals, the Employer Supported Childcare scheme will continue but will not be open to new members from August 2015. Existing participants will be able to transfer to the new scheme but will not be able to take advantage of both.

The government has increased the entitlement for three and four year olds to free early years schooling from 12.5 to 15 hours a week while Labour has said this will go up to 25 hours if it wins power after 2015.

Labour warned that parents are likely to be paying more of their disposable income towards childcare in 2018 than they are now as a result of the government's policies.
 
The Conservatives, Lib Dems and Labour are all seeking to promote family-friendly policies in the run-up to next year's election.

If you need any help and advice on Nursery Schools and or starting up a new business contact Lavinia Newman, Stuart Coleman or Tonmoy Kumar to discuss how ABDS can help

ABDS Chartered Certified Accountants of Southampton.
Tel: 023 8083 6900  E-mail: abds@netaccountants.net

Brilliant with numbers   
Great with people  
Clear and precise with advice
Timely and cost effective 
In touch with issues that face our clients
Mindful of our client’s long term strategic goals

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