People are being told how they can get the cash
HMRC has issued an update, telling families they can get up to £1,000 every three months if they sign up. It said more than 600,000 families cut their childcare costs with Tax-Free Childcare, as it encourages others to sign up ahead of the October half-term.
Tax-Free Childcare helps working families with their childcare costs by saving up to £2,000 per year for each of their children up to the age of 11 or £4,000 per year up to aged 16 if the child is disabled, HMRC said. It added that latest figures showed 601,620 families received a share of £55.7million in government top-ups in June, with each family getting an average of £93 added to their Tax-Free Childcare savings pot. For every £8 parents deposit in their child’s account, the government tops it up by £2.
Myrtle Lloyd, HMRC’s chief customer officer, said: “Paying for childcare while you work doesn’t have to be a nightmare for your bank balance this Hallowe’en. Tax-Free Childcare can make a real difference. Go to GOV.UK to find out more today.”
How much HMRC Tax-Free Childcare pays
Signing up to Tax-Free Childcare today means families can save on whatever Hallowe’en half-term childcare plans they need, as well as those for the year ahead, HMRC said. Parents can receive up to £500 (or £1,000 if their child is disabled) every three months towards their childcare costs.
Savings can be used to pay for whatever approved childcare suits your family’s needs – nursery for younger children, before and after school clubs or activity clubs during the school holidays.
Once families have opened a Tax-Free Childcare account, they can deposit money and use it straight away or keep it in the account to use it whenever it’s needed. Any unused money can be withdrawn from the account at any time.
Eligibility for Tax-Free Childcare from HMRC
Families could be eligible for Tax-Free Childcare if they:
- have a child or children aged 11 or under. They stop being eligible on September 1 after their 11th birthday. If their child has a disability, they receive up to £4,000 a year until September 1 after their 16th birthday
- the parent and their partner (if they have one) earn, or expect to earn, at least the National Minimum Wage or Living Wage for 16 hours a week, on average
- each earns no more than £100,000 per annum
- do not receive Universal Credit or childcare vouchers
Full eligibility can be found on GOV.UK. Tax-Free Childcare can be used alongside the free childcare hours, subject to eligibility, HMRC confirmed.
