HMRC is using Playday, the national day for play, to remind working parents about the Tax-Free Childcare scheme, which can help eligible families meet the cost of nurseries, childminders, holiday clubs, breakfast clubs and after-school clubs.
The campaign may also be of interest to employers in supporting working parents and improving employee wellbeing, particularly during school holiday periods when childcare costs can be a significant financial burden.
Families can save up to £2,000 per child
Under the scheme, the government adds £2 for every £8 paid into a Tax-Free Childcare account, providing support of up to £2,000 per year per child. The maximum increases to £4,000 per year for a disabled child.
Families can receive up to £500 worth of top-up money (£1,000 for a disabled child) every three months.
Parents can open an account for each eligible child and use the funds to pay approved childcare providers. According to HMRC, nearly 75,000 childcare providers are now registered to receive payments through the scheme.
Approved childcare includes nurseries, childminders, holiday clubs, breakfast clubs and after-school clubs.
While Tax-Free Childcare is often associated with younger children, HMRC reports that use of the scheme for children aged eight and over has increased by more than 20% compared with the previous year.
Eligibility
Families may qualify if they:
- Have a child aged 11 or under, or a disabled child aged up to 16.
- 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 a year.
- Do not receive Universal Credit or childcare vouchers.
Once an account has been opened, funds can be used immediately or saved for future childcare costs, and unused money can be withdrawn at any time.
Tax-Free Childcare can be used alongside government funded childcare hours, if eligible.
To find out more and apply, see: https://www.gov.uk/tax-free-childcare
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