NewsHMRC help towards childcare cost

HMRC help towards childcare cost

HMRC has issued a reminder to families that are eligible for tax-free childcare that they can use the scheme to help with their childcare costs as children go back to school

The tax-free childcare scheme is available to parents or carers with children aged up to 11, or 17 if their child is disabled and for every £8 deposited into their account, they will receive a £2 top-up every three months, up to £500, or £1,000 if their child is disabled.

How much money can be saved by eligible families using tax-free childcare?

According to the tax authority, qualifying families can save money on childcare benefits by receiving a government top-up of up to £2,000 per year or £4,000 per year if their child is disabled.

HMRC state that the 20% top-up is paid into the tax-free childcare account and is ready to use almost instantly, meaning parents and carers can use the money towards the cost of childminders, breakfast, and after school clubs, and approved play schemes.

How many families benefited from using tax-free childcare?

In June 2021, about 308,000 families across the UK benefited from using tax-free childcare, but HMRC says that thousands of those eligible are missing out on this opportunity.

Myrtle Lloyd, director general for customer services, HMRC said: ‘As your children head back to school this autumn, don’t miss out on the opportunity to receive your 20% top-up to help pay for their childcare. It is quick and easy to sign up, just search ‘tax-free childcare’ on GOV.UK.’

Is tax-free childcare also available for pre-school-aged children?

HMRC reminds parents that the tax-free childcare is also available for pre-school-aged children attending nurseries, childminders, or other accredited childcare providers.

When can parents returning to work after parental leave, apply for tax-free childcare?

Parents and carers, who are returning to work after parental leave, can apply for a tax-free childcare account for that child before they need to start using it and families are able to start depositing money 31 days before they return to work.

By doing this HMRC says it can maximise the potential government top-up saving.

Childcare providers are also able to sign up for a childcare provider account through GOV.UK to receive payments from parents and carers via the scheme.

HMRC help towards childcare cost
HMRC help towards childcare cost

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