HM Revenue and Customs (HMRC) is urging working parents in Scotland not to miss out on the chance to get up to £2,000 a year to help pay for regulated childcare, including holiday clubs and other out-of-school activities, during the summer break.
Tax-Free Childcare provides thousands of eligible working families with up to £500 every three months, or £1,000 if their child is disabled, towards the cost of holiday clubs, before and after-school clubs, childminders and nurseries, and other approved childcare schemes.
For every £8 deposited into a Tax-Free Childcare online account, families will receive an additional £2 in UK Government top-up, and it is available for children aged up to 11, or 17 if the child has a disability.
New Tax-Free Childcare statistics from HMRC show that 29,110 families in Scotland received up to £2,000 towards the cost of their childcare during the 2021 to 2022 tax year - up from 20,330 in the previous year.
However, HMRC warns that hundreds of thousands of families could be missing out, with recent research estimating that about 1.3 million families could be eligible for this UK Government support.
Parents and carers are being urged to check their eligibility and register for Tax-Free Childcare via GOV.UK, here.
Across the UK, 512,415 families used Tax-Free Childcare in the 2021 to 2022 tax year, compared to 374,135 in the 2020 to 2021 tax year.
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 nurseries, childminders and after school clubs.”
Helen Whately, HM Treasury’s Exchequer Secretary to the Treasury, 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.”
The latest monthly comparisons for Scotland also show that a record number of families were using their Tax-Free Childcare account in March 2022, some 22,710 families compared to 15,240 in March 2021.
How does the scheme work?
The scheme offers a 20% UK Government funded top-up on money deposited into Tax-Free Childcare accounts, which can be used to pay their childcare provider.
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.
For example, if parents and carers have school-aged children and use holiday clubs during school holidays, they could deposit money into their accounts throughout the year. This means they 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.
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