Five ways to cut the cost of childcare
1. Share the costs
Use websites nannyshare.co.uk and thenannysharers.co.uk, as well as gumtree.com, to find families and nannies in your local area, and then share a nanny - and the cost.
2. Consider flexible working
Could you manage to work from home and watch your child? Anyone caring for a child aged six or under has the right to claim flexible working hours from their employer. You need to have been in your job for at least 26 weeks.
3. Use all your benefits
Families with at least one child are entitled to child benefit until 2013 (when payments will be stopped for families where either parent earns over £44,000 a year). You'll receive £20.30 a week tax-free for your eldest child, plus £13.40 for each additional child.
You can also claim child tax credits, which are based on your income and how many children you have. If you work more than 16 hours a week and pay for registered childcare, you can also claim some of the cost through working tax credits.
4. Utilise free childcare
Contact your local family information service (familyinformationservices.org.uk) to see what childcare arrangements and after-school clubs are running in your local area. Children aged three to four are eligible for at least 15 hours a week of early years care.
5. Childcare vouchers
Ask your employer about childcare voucher schemes, which are a form of salary sacrifice. Because you claim these benefits before tax, effectively you will be reducing your tax bill.
Basic-rate taxpayers stand to receive vouchers worth a maximum of £243 a month, while higher-rate earners can claim up to £124.
A tax-efficient way of receiving staff benefits, where an employee agrees to forego a proportion of their salary for an equivalent contribution into their pension scheme or in exchange for company car, gym membership, childcare vouchers or private medical insurance. A salary sacrifice scheme is a matter of employment law, not tax law, and is often entered by an employee who is about to move into the higher 40% tax bracket.
A special government scheme operated through employers that allows you to pay for childcare from your PRE-tax salary. The vouchers cover childcare up to 1 September after your child’s 15th birthday (16th if they are disabled) and can be used at any registered and regulated nursery, playgroup and for nannies, childminders or au pairs.