HM Revenue and Customs (HMRC) has urged parents who are in work to avoid missing out on as much as £2,000 per year to help with childcare costs.
With the school term coming to an end, families struggling financially amid the cost of living crisis can use the money to help pay for holiday clubs and out-of-school activities over the summer.
Tax-Free Childcare gives eligible households as much as £500 every three-month period — or £1,000 if their child has a disability — to put towards approved childcare schemes.
READ MORE — Glasgow property: Farm half an hour out of city offers 'wonderful lifestyle opportunity'
As reported by the Daily Record, for each £8 that is put into Tax-Free Childcare online account, recipients will get an extra £2 if they have a child aged 11 or under — or 17 if they are disabled.
Recent data released by HMRC reveals that during the 2021/22 tax year, more than 29,100 families across Scotland were given as much as £2,000 to help with childcare costs.
However, the UK Government department has warned that hundreds of thousands of households are missing out on the help, with recent data indicating that approximately 1.3 million families may be eligible.
Parents and guardians have been urged to see if they are eligible for Tax-Free Childcare on the UK Government website.
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 commented: “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?
It allows claimants to get 20% extra on money deposited into accounts, which can be used to fund childcare.
An account can be set up at any time, and is available to use immediately.
For example, if you have a child or children who are of school-age and attend holiday clubs over the summer, you could deposit money into the account during the year to spread the cost out — and would get an extra 20% free.
Any unused money that is deposited can be simply withdrawn at any time.
Pre-school children
You can also make use of the scheme if your children attend nurseries, childminders, or other childcare providers.
Considering childcare costs for young children can be very expensive, the scheme may really help financially.
Childcare providers can also sign up for a childcare provider account via GOV.UK to receive payments from parents and carers via the scheme.
