Childcare schemes provide a tax-efficient way to fund your child’s care, between the ages of four and fifteen.
There are currently two childcare schemes in operation. There’s the Childcare Voucher Scheme, which closed to new entrants on 4 October 2018, and the Tax-Free Childcare Scheme, which replaced the old scheme.
The main difference between the two is that Childcare Vouchers are treated as a gross deduction from monthly pay and Tax-Free Childcare is treated as a net deduction. Anyone who is already part of the Childcare Voucher Scheme before the change will continue to be treated the same but those who wish to apply now will be enrolled in the Tax-Free Childcare Scheme. If you decide to join the LLP, you will still be eligible to receive existing Childcare benefits through either Scheme.
If you want to enrol for the Tax-Free Childcare Scheme after joining, you are still eligible to apply. Please be aware that upon becoming a partner, you are taxed through Self-Assessment. So, if you were employed and taxed through PAYE before joining the LLP, you must update your employment status with either scheme from ‘Employed’ to ‘Self-Employed’. New applicants must also enrol as Self-Employed.