Sole traders await end of ‘prejudicial’ childcare scheme

The “prejudicial” treatment that sole traders have suffered from the government on childcare support is finally scheduled to end, an accountant says.

Unlike childcare vouchers, which are not open to freelancers, ‘Tax-Free Childcare’ (from October) will be, says James Trowell, head of tax and accounting at Dolan Accountancy.

It means that people who work for themselves will, for the first time, be able to benefit from the government’s help to cut the cost of childcare, once ‘TFT’ replaces the vouchers.

“This is a welcome change, as until now the government's treatment of unincorporated traders should have been better,” the accountant said.

“By not allowing them access to childcare vouchers, the government was being prejudicial against sole traders, but not their incorporated, limited company counterparts [who could].”

Even better for very new freelancers is the small print in the TFT scheme that says, a proposed weekly earnings limit to qualify of £120, does not apply at all to sole traders who started their business less than 12 months ago.

“Perhaps with Tax-Free Childcare, the government is trying to make amends in that sole traders finally can receive this perk,” Mr Trowell said.

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