Tax Free Childcare

Tax Free Childcare is run by the Government, and employers will have no involvement with the administration of the scheme. 

  • Tax Free childcare can save you 20% on your childcare costs but up to a maximum saving of £2,000 per child.
  • Anyone can apply for tax free childcare including the self employed.
  • You must however earn a minimum of £155 per week and if you are a couple both parents must work.
  • The maximum child’s age is 12 years old.

Childcare Vouchers

HMRC have confirmed that childcare vouchers will close to new starters in April 2018. After April 2018, any employee who is in the scheme will be able to continue to receive childcare vouchers.

  • Childcare vouchers can save you 32% on your costs if you’re a basic rate tax payer but to a maximum saving of £933.12 per parent.
  • Childcare vouchers are only available if the employers offer them.
  • There are no minimum earnings but the vouchers requested must not take you below minimum wage.
  • The maximum child’s age is 15 years old.



Are you taking advantage of the MARRIAGE ALLOWANCE? 

This year, 2017/18 the transferable allowance increases to £1,150. This entitles you up to a £230 tax saving during the tax year.

HMRC are still allowing backdated claims which means if you didn't claim in the last two tax years you may be entitled to a £432 refund of tax.(£212 for 2015/2016 & £220 for 2016/2017)

To benefit as a couple, you (as the lower earner) must have an income of £11,500 or less.

You can get Marriage Allowance if all the following apply:


  • you’re married or in a civil partnership
  • you don’t earn anything or your income is £11,500 or less
  • your partner’s income is between £11,501 and £45,000 (or £43,000 if you’re in Scotland)


Are you now qualified as a 'limited cost trader'? 

From April 2017, many small limited companies which have low annual costs will face a higher VAT liability if they use the Flat Rate scheme.

According to the HMRC, this is defined as a business which has a VAT-inclusive expenditure on relevant goods of either:

  • Less than 2% of their VAT inclusive turnover in a prescribed accounting period


  • Greater than 2% of their VAT inclusive turnover but less than £1,000 per annum if the prescribed accounting period is on year.

Goods, for the purposes of this measure, must be used exclusively for the purpose of the business but exclude the following items:

  • capital expenditure
  • food or drink for consumption by the flat rate business or its employees
  • vehicles, vehicle parts and fuel (except where the business is one that carries out transport services - for example a taxi business - and uses its own or a leased vehicle to carry out those services)


These exclusions are part of the test to prevent traders buying either low value everyday items or one off purchases in order to inflate their costs beyond 2%.



Are you paying the correct rates of pay to your employees?

The rates from 1 April 2017 are:

  • £7.50 per hour – 25 yrs old and over
  • £7.05 per hour – 21-24 yrs old
  • £5.60 per hour – 18-20 yrs old
  • £4.05 per hour – 16-17 yrs old
  • £3.50 per hour for apprentices under 19 or 19 & over who are in the first year of apprenticeship.

Previous rates

  • The following rates were for the National Living Wage and the National Minimum Wage from October 2016.



25 and over

21 to 24

18 to 20

Under 18


October 2016 to March 2017













Our commentary on the Chancellor's Autumn Statement for 2014 is now available in the downloads section of the web site as a pdf.  Download here.

Peter Jackson stands proudly by one of his two water colours which now hang in the waiting room at Dalton Pardoe chartered accountants in Kingswinford.

Read more: Water Colours of the Black Country