Working parents reminded of tax-free childcare top-up scheme
THOUSANDS of working families could be missing out on an opportunity to get up to £2,000 a year to help with the cost of childcare.
HM Revenue and Customs (HMRC) is reminding parents of the top-up ahead of February half-term
Tax-Free Childcare – the 20 per cent childcare top-up – provides eligible working families with up to £500 every three months (or £1,000 if their child is disabled) towards the cost of holiday clubs, before and after-school clubs, childminders and nurseries, and other accredited childcare schemes.
More than 25,020 working families used the scheme in September 2021, in the East Midlands. Overall, HMRC paid out more than £35 million in top-up payments, which was shared between nearly 316,000 families across the UK – an increase of about 90,000 families compared with September 2020.
Tax-Free Childcare is available for children aged up to 11, or 17 if the child has a disability. For every £8 deposited into an account, families will receive an additional £2 in government top-up.
Parents and carers can check their eligibility and register for Tax-Free Childcare via GOV.UK.
Myrtle Lloyd, HMRC’s director general for customer services, said: “The 20 per cent government top-up offers working families help to pay for childcare, whether it’s nursery bills, after school clubs or holiday clubs. Search ‘Tax-Free Childcare’ on GOV. UK to find out more.”
Helen Whately, exchequer secretary to the Treasury, said: “Whether it’s for holiday clubs, breakfast clubs, or childminders and nurseries, Tax-Free Childcare is a great offer that gives working parents a helping hand with their childcare costs.
“This government is committed to supporting working families which is why it’s fantastic that thousands more are saving money through the Tax-Free Childcare scheme. I urge as many parents as possible to take advantage of this support.”
By depositing money into their accounts, families can benefit from the 20 per cent top-up and use the money to pay for childcare costs when they need it. Accounts can be opened at any time of the year and can be used straight away. For example, if parents and carers have school-aged children and use holiday clubs during school holidays, they could deposit money into their accounts throughout the year. This means they could spread the cost of childcare while also benefiting from the 20 per cent government top-up.
Tax-Free Childcare is also available for pre-school aged children attending nurseries, childminders, or other childcare providers. Families with younger children will often have higher childcare costs than families with older children, so the tax-free savings can really make a difference.
Childcare providers can also sign up for an account via GOV.UK.