Many parents have been missing out on Tax-Free Childcare, after it was revealed that one in five parents did not know they met the eligibility criteria.
The Government has launched a push on the allowance, a scheme in which parents can claim up to £500 every three months, and says claiming it will help ease the cost of living crisis.
The money can be put towards the cost of nurseries and childminders, as well as holiday clubs and sports centres.
Research published by HM Revenue & Customs HMRC) found that last March, although 1.3million homes qualified for the support, only 282,000 families used it.
The scheme is available for children aged up to 11, or 17 if the child has a disability. For every £8 deposited into an account, families will receive an additional £2 in government top-up, capped at £500 every three months, or £1,000 if the child is disabled.
You can use Tax-Free Childcare for:
• Childminders, nurseries and nannies
• After school clubs and play schemes
• Your childcare provider must be signed up to the scheme before you can pay them and benefit from Tax-Free Childcare
• You can apply for tax-free childcare if you’re single or with a partner
• You need to be earning at least the minimum wage, for the equivalent of 16 hours a week – the same goes for your partner if you have one
• Self-employed workers are also eligible if they earn this amount too
• If your child is disabled you may get up to £4,000 a year until they’re 17
Parents and carers can check their eligibility and register for Tax-Free Childcare on GOV.UK.
They can apply for an account at any time and start using it straight away. By depositing money into their accounts, families can benefit from the 20 per cent top-up and use the money to pay for childcare costs when they need to, especially during the summer holidays.
Tax-Free Childcare is also available for pre-school aged children attending nurseries, childminders or other childcare providers. Families with younger children will often have higher childcare costs than families with older children, so the tax-free savings can really make a difference.
Childcare providers can also sign up for a childcare provider account on GOV.UK to receive payments
For help and advice on tax and related matters please contact our expert team.