Millions of families can claim up to £2,000
Millions of UK households can claim up to £2,000 back from HM Revenue and Customs (HMRC) this year, although a three-month warning accompanies the scheme. The tax authority operates an initiative that could make many earning less than £100,000 eligible for government support.
Tax-Free Childcare is designed to help families save on childcare costs for working parents. In addition to earning below the aforementioned amount, you’ll qualify if you have a child under 11, or under 16 if your child has a disability.
The discount can be used to cover the cost of school clubs, childminders and other wraparound care. It’s worth up to £2,000 per child each year, or up to £4,000 if your child has a disability.
Once you’ve registered for tax-free childcare, the government will contribute £2 for every £8 you deposit into your online account. As outlined on Gov.uk: “You can get Tax-Free Childcare at the same time as 15 or 30 hours free childcare if you’re eligible for both” and it further clarifies that this benefit applies to various childcare services including after-school clubs, childminders, nurseries, and nannies.
The childcare provider must be enrolled in the scheme for you to make payments and claim the top-ups. For parents of disabled children, the additional funds from Tax-Free Childcare can be utilised to cover extra childcare hours and to assist providers in obtaining specialised equipment required by your child, such as mobility aids.
Whether you qualify for tax-free childcare hinges on your employment status, income, your child’s age and circumstances, and your immigration status. As per HMRC, you can generally utilise the scheme if you’re employed, on sick or annual leave, or on shared parental, maternity, paternity or adoption leave, and you’re returning to work within 31 days of the date you first applied.
Even if you’re currently unemployed, you may still be eligible if your partner is working and you receive Severe Disability Allowance, Incapacity Benefit, Carer’s Allowance, Carer Support Payment (Scotland only) or contribution-based Employment and Support Allowance.
However, regardless of your circumstances, if you wish to continue claiming, you need to verify that your details are current with HMRC every three months. Failure to do so will result in the government stopping any payments into your Tax-Free Childcare account.
