Households across the UK with children under the age of 11 are being urged to “sign up” for payments of up to £2,000 per year from HM Revenue and Customs (HMRC).
The money comes from HMRC’s Tax-Free Childcare scheme, which helps working families save on childcare costs. For every £8 that parents deposit into their child’s account, the government will then top it up by £2. Parents can get up to £500 worth of top-ups every three months for each child under the age of 11, which works out to a maximum of £2,000 per year towards childcare costs. This amount rises up to £1,000 every three months if a child is disabled, up until they are aged 16, giving parents up to £4,000 annually towards approved childcare.
Savings can be used to pay for whatever approved childcare suits your family’s needs, whether this is nursery for younger children, or before and after school clubs or activity clubs for older children during the school holidays.
Once you’ve opened a Tax-Free Childcare account, you can deposit money and use it straight away or keep it in the account to use it whenever it’s needed. Any unused money can be withdrawn from the account at any time.
Latest figures from HMRC show 601,620 families received a share of £55.7 million in government top-ups in June with each family getting an average of £93 added to their Tax-Free Childcare savings pot.
HMRC is now urging more families to check if they may be eligible for the scheme so they can start saving before November, just in time for the school half-term holidays at the end of this month.
As such, by signing up now, families can save on whatever Halloween half term childcare plans they need, as well as continuing to make savings for the year ahead.
Myrtle Lloyd, HMRC’s Chief Customer Officer, said: “Paying for childcare while you work doesn’t have to be a nightmare for your bank balance this Hallowe’en. Tax-Free Childcare can make a real difference. Go to GOV.UK to find out more today.”
HMRC says families could be eligible for Tax-Free Childcare if they:
the parent and their partner (if they have one) 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
do not receive Universal Credit or childcare vouchers
You can apply for the HMRC scheme at any time unless you’re starting or re-starting work, or you’re on maternity, paternity, shared parental or adoption leave. If you’re starting or returning to work, you can apply from the following dates:
Starting or returning to work between October 1 and January 31 – apply from September 1
Starting or returning to work between February 1 and April 30 – apply from January 1
You can also claim Tax-Free Childcare at the same time as 30 hours of free childcare through Free Childcare for Working Parents if you’re eligible for both.
