Children: Day Care

(asked on 18th April 2019) - View Source

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what the Government's rationale was for the policy of introducing an income threshold on eligibility for tax-free childcare.


Answered by
Elizabeth Truss Portrait
Elizabeth Truss
This question was answered on 30th April 2019

Tax-Free Childcare is limited to families where parents earn under £100,000 per year. The £100,000 per parent cap on Tax-Free Childcare ensures that support is targeted at the working families who require the most support in order to return to work or work more.

The £100,000 limit was announced at Autumn Statement 2015 and legislated for in 2016 because it is simple for parents to understand their eligibility, and because it aligns to an existing boundary in the tax system. The government published its final impact assessment of the introduction of Tax-Free Childcare, including the setting of an upper income limit at £100,000 per parent, in March 2017 (https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/652939/Tax-free_childcare_Impact_Assessment-March_2017.pdf).

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