Update you from Aaron Associates.

Tax-Free Childcare is a scheme which allows parents to pay into an online account. To qualify for Tax Free Childcare all parents in the household must generally meet a minimum income level, based on working 16 hours a week (an average £120 a week) and each earn less than £100,000 a year.

Subject to any restrictions (see below), the money paid in is then topped up by 25% by the government - so an £8 payment is topped up by £2. These funds can then be used to pay for:

  • registered childminders, nurseries and nannies
  • registered after-school clubs and play-schemes
  • registered schools
  • Home caseworkers working for a registered homecare agency.


The scheme will be available for children up to the age of 12, or 17 for children with disabilities.



In addition to the new scheme, the amount of free childcare for schemes such as Surestart has been doubled from 15 hours to 30 per week for children aged three or four.

Eligible clients will be able to apply online through the childcare service. They will be given a code which they will need to take to their local authority (or directly to the childcare provider), and this will be used to allocate the child a free place accordingly.



Carers allowance - increase to earnings limit
The amount a claimant can earn whilst being entitled to Carer’s Allowance will increase from £110 per week to £116 per week from April 2017.

The change, introduced by new regulations SI.No.386/2017, comes into effect from 10 April 2017.

Carer's allowance is taken into account as income in full for tax credit purposes and is treated as unearned income for the purposes of Universal Credit. Unearned income reduces the amount of Universal Credit award £1 for £1.


Registration thresholds increase for 2017/18

In April 2017 the turnover thresholds applicable to compulsory VAT registration (and deregistration) increased.

The new compulsory registration threshold is £85,000, and the deregistration threshold is £83,000.

VAT fuel scale charges

HMRC have issued details of the updated VAT fuel scale charges which apply from the beginning of the next prescribed VAT accounting period starting on or after 1 May 2017.

Businesses must use the new scales from the start of the next prescribed accounting period beginning on or after 1 May 2017.

Changes to the PAYE Tax system using Real Time Information

HMRC have announced that from the end of May 2017 they will be using Real Time Information to make adjustments to employee tax codes in-year as and when the need arises.

HMRC states that this change in procedures will:

  1. offer more certainty to employers and their employees
  2. reduce the instances of unexpected tax bills arising
  3. ensure that more employees end the tax year having paid the right amount of tax.

Employers are advised to expect from 1 June onwards, some employee enquiries relating to tax code changes.