Every penny counts at the moment as the cost of living crisis deepens. Inflation hit double figures this month and the news is full of stories about families cutting back or ways to save cash. HM Revenue and Customs (HMRC) says that working families relying on childcare could claim up to £2,000 a year to assist their budget.
With the end of the summer holiday in sight, millions of children will be going back to school this autumn and for many parents that means reviewing childcare considerations. Tax-free childcare could help those households needing support.
Myrtle Lloyd, HMRC’s director general for Customer Services, said: “Tax-Free Childcare can make a big difference to families, helping with the bills for things like wraparound care for school children, nurseries, childminders and holiday clubs. It’s easy to register – search ‘Tax-Free Childcare’ on GOV.UK.”
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In June 2022, approximately 391,000 working families benefitted from Tax-Free Childcare, receiving a share of £41.6 million in government top-up payments – but there is a fear that thousands more could be missing out.
Tax-Free Childcare provides financial support towards the cost of childcare for children aged 11 or under, or up to 17 if the child has a disability. For every £8 paid into a Tax-Free Childcare online account, families will automatically receive an additional £2 in government top-up.
Families receive up to £500 every three months (£2,000 a year) per child, or £1,000 (£4,000 a year) if their child is disabled, helping towards the cost of before and after-school clubs, childminders and nurseries, holiday clubs and other approved childcare schemes.
Accounts can be opened at any time of the year and can be used straight away, and money can be deposited at any time and used when needed. Any unused money that is deposited can be simply withdrawn at any time. More than one million families in the UK are entitled to some form of government childcare support and the government is encouraging those eligible to not miss out on their entitlements. Families can find out what childcare support is best for them via government website Childcare Choices.
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