The recent Budget made changes to the support available to help pay for childcare in the UK, but also added new levels of confusion, making it harder to work out what individual households are entitled to.

Unfortunately, childcare costs in the UK are amongst the highest globally, so making sense of what is available is vital.

In a nutshell, the Government is working towards replacing the current childcare voucher system – which was administered by employers - and replacing it with a new tax-free childcare scheme that parents set up themselves. This could be welcome news to the parents who found themselves struggling to use their childcare vouchers in their local communities, and for the self-employed.

Tax-free childcare will come into effect for parents of the youngest children from the end of April 2017, then will be rolled out as the year progresses. Just like the vouchers, it can be used to offset the costs of nursery places and fees for childminders and nannies. The complication comes from the way this benefit is structured.

Basically, you will be opening a special childcare account with the National Savings and Investment Bank. The Government will pay in £2 for every £8 you pay into this account. The maximum Government contribution will be £2,000 per child. Money from this account can only be used for childcare and covers children aged up to 11 (or 16 if they are registered disabled).

Both partners must be working to apply for tax-free childcare. If you and your partner work less than 16 hours a week, or one of you earns over £100,000 a year, you are ineligible.

The childcare voucher scheme will continue in tandem with the tax-free childcare offer, for now, offering parents a choice (you can’t have both). New joiners can opt for vouchers up until April 2018.

The best way forward is to look at both schemes, and see which one best fits your circumstances. Tax-free childcare potentially offers you a higher pay-out if you are eligible, particularly if your childcare costs are high.

To help communicate and answer queries, the Government created a website for parents: Childcare Choices. It includes an online calculator so you can experiment with different entitlements to find what your best options are. It shows the tiers of support that will become available, depending on the age of your child. The website can also be used to register for tax-free childcare.

If you're still concerned about the new childcare scheme, contact Adcock Accounting for more advice by email This email address is being protected from spambots. You need JavaScript enabled to view it. or call 01623 490120.