HM Revenue and Customs (HMRC) has issued an update to families in Scotland, warning them not to miss out on up to £2,000 per year.
This money is available to working parents to help cover the costs of regulated childcare, such as holiday clubs and other out-of-school activities, across the summer.
Households eligible for Tax-Free Childcare receive as much as £500 every three-month period — or £1,000 if their child is disabled — to help pay for holiday clubs, before and after-school clubs, childminders and nurseries, and other approved childcare schemes.
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For each £8 that is added to a Tax-Free Childcare online account, recipients will get an extra £2 in UK Government top-up, and families with children ages up to 11 years old are eligible — or 17 years old if the child is disabled.
New data released by HMRC reveals that over 29,000 households in Scotland were given as much as £2,000 to help with childcare costs in the 2021/22 tax year.
However, according to HMRC, hundreds of thousands of families are still missing out on the money, with figures estimating that up to 1.3 million households could be eligible for support.
Parents and guardians have been urged to check whether they are eligible for Tax-Free Childcare, and register if they are, through GOV.UK here.
HMRC’s Director General for Customer Services Myrtle Lloyd stated: “Tax-Free Childcare can make a big difference to families, helping with the bills for things like nurseries, childminders and after school clubs.”
HM Treasury’s Exchequer Secretary to the Treasury Helen Whately said: “It’s fantastic that more parents are taking up Tax-Free Childcare. This support provides a helping hand with childcare costs for working families.
“With over one million families eligible, I want to encourage parents to take advantage of Tax-Free Childcare and keep the extra pounds in their pocket.”
How does the scheme work?
The scheme provides a 20% UK Government-funded top-up to money that is added into Tax-Free Childcare accounts, intended to help cover childcare costs.
These accounts can be opened at any time and can be used immediately.
For example, a parent or guardian with school-aged children who make use of holiday clubs during the summer holiday could deposit money into their account throughout the year — and as a result could spread the cost of childcare while also benefiting from the 20% top-up.
Any unused money that is deposited can be simply withdrawn at any time.
Pre-school children
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 a childcare provider account via GOV.UK to receive payments from parents and carers via the scheme.
