HM Revenue and Customs (HMRC) issued a press release recently reminding working families to save money on their childcare costs in time for the school holidays by making use of the Tax-free Childcare support.
With the Easter break looming, families yet to sign up for Tax-Free Childcare could be missing out on annual savings of up to £2,000 per child, or £4,000 if their child is disabled.
Tax-Free Childcare can help pay for approved childcare for children aged 11 or under, or up to 16 if the child has a disability. Parents can receive up to £500 (or £1,000 if their child is disabled) every 3 months, which means for every £8 paid into their online account, they will automatically receive an additional £2 top up from the government.
It takes just 20 minutes to apply online for a Tax-Free Childcare account and can be used to help pay for a child’s nursery, childminder, breakfast or after school club or holiday activity club. It can also be used alongside the 15 or 30 hours free childcare offer and to help pay for any specialist equipment needed for a disabled child when they’re attending childcare.
Once an account is opened, parents can deposit money immediately, so it is ready to be used whenever it is needed; and unused money in the account can be withdrawn at any time.
Families could be eligible for Tax-Free Childcare if they:
have a child or children aged 11 or under. They stop being eligible on 1 September after their 11th birthday. If their child has a disability, they may get up to £4,000 a year until 1 September after their 16th birthday;
earn, or expect to earn, at least the National Minimum Wage or Living Wage for 16 hours a week, on average;
each earn no more than £100,000 per annum; and
do not receive tax credits, Universal Credit or childcare vouchers.
A full list of the eligibility criteria is available on GOV.UK.
Eligible working parents of 2-year-olds can now register to access 15 hours free childcare per week from April 2024.
The offer will expand to 30 free hours of childcare for working parents from nine months old up to the date when their child starts school (by September 2025), and is set to save parents using the full 30 hours up to £6,900 per year.
Families can learn more about the childcare offers available to them and what could fit their family by visiting Childcare Choices.