Self employed: child care and tax

(6 Posts)
fionathepink Wed 09-Sep-15 21:19:10

Hello

Does anyone know if the self employed can claim their child care as an expense and get the tax back? I can't get child care vouchers because it's all been postponed.

Thanks X

OP’s posts: |
NickNacks Wed 09-Sep-15 21:28:19

No you can't. That's a personal expense not a business one.

GoooRooo Wed 09-Sep-15 21:32:37

Nope unfortunately not. When the new childcare payment system kicks in in 2017 you'll be able to benefit then by putting money in an account and the government topping it up. Until then, if you're self employed you get no tax breaks for childcare - it sucks.

Details on the new scheme here
www.moneysavingexpert.com/news/family/2015/07/tax-free-childcare-scheme-delayed-until-2017

GoooRooo Wed 09-Sep-15 21:34:08

There is a way round it though by the way. If you set yourself up as a Ltd company and become a PAYE employee you can also pay yourself childcare vouchers under the current rules. However, you need to make sure that it's tax efficient for you to do that so best to chat to a reliable accountant about it.

fionathepink Thu 10-Sep-15 09:50:02

That's really just annoying. I couldn't do my job without the childcare - much like an employed person as I work full time. It is as necessary to work as the internet.

I think I'm better off not being a LTD company and I would now have to pay tax on dividends.

Thanks for your help everyone.

OP’s posts: |
GoooRooo Thu 10-Sep-15 09:53:22

Even with the tax on dividends it might be worth it because of the savings on National Insurance and the tax breaks on childcare - it is in my case. I had to get my accountant to work it out for me though as I was umming and ahhing about going back to being a sole trader. It totally depends on how much your revenue is and how much you plan to take out as both PAYE and dividends.

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