Autumn is here and with October school holidays just around the corner, HM Revenue and Customs (HMRC) is reminding working families to give their childcare budget a treat this Halloween by opening a Tax-Free Childcare account.
It provides working families with up to £2,000 a year per child off their childcare bills for children up to the age of 11, or £4,000 a year up to the age of 16 if their child has a disability.
For every £8 paid into a Tax-Free Childcare account, families automatically receive a top up from the government of £2. Using the tax-free top up, families can save up to £500 every 3 months for each child or £1,000 if their child is disabled.
It takes around 20 minutes to open an account and money can be deposited at any time. The money can be used straight away or left in the account and used whenever it is needed. Any unused money can be withdrawn at any time.
Families need plenty of childcare options when the weather turns cold and wet and days get shorter. We would urge parents to ensure they’re taking advantage of all opportunities available – whether it’s sending their child to wraparound school club or a holiday club during the half term break. Tax-Free Childcare provides financial help that fits your family – to support your childcare needs and save you money. Search ‘Tax-Free Childcare’ on GOV.UK to get started.
Eligible working families can register for a Tax-Free Childcare account.
School term dates vary across the UK.
Expansion of childcare
This government is rolling out what they claim to be the single biggest investment in childcare in England ever, expanding 30 free hours of childcare for working parents and supporting children from nine months old up to when they start school. This is claimed to save eligible working parents up to an average of £6,500 per year. Parents can visit the Childcare Choices to find out about the range of support available from the government with the costs of childcare.
Parents and carers could be eligible for Tax-Free Childcare if they:
- have a child or children aged up to 11. They stop being eligible on 1 September after their 11th birthday. If their child is disabled, they may get up to £4,000 a year until 1 September after their 16th birthday
- earn, or expect to earn, at least the National Minimum Wage or Living Wage for 16 hours a week, on average
- each earn no more than £100,000 per annum
- do not receive tax credits, Universal Credit or childcare vouchers
Each eligible child requires their own Tax-Free Childcare account. If families have more than one eligible child, they will need to register an account for each child. The government top-up is then applied to deposits made for each child, not household.
Account holders must confirm their details are up to date every 3 months to continue receiving the government top-up.
Childcare providers can also sign up for a childcare provider account to receive payments from parents and carers via the scheme.