With the Easter break just weeks away, HMRC is reminding working families to sign up for Tax-Free Childcare to benefit from annual savings of up £2000 per child (or £4000 if the child is disabled) – just in time for the school holidays.
The government’s Tax-Free Childcare scheme can help families pay for approved childcare for children aged 11 or under, or up to 16 if the child has a disability. Parents could be entitled to up to £500 (or £1000 if their child is disabled) every three months. This means that for every £8 paid into their online account, an additional £2 will be automatically added from the government.
The Tax-Free Childcare payments can be used to pay for a child’s nursery, childminder, breakfast or after-school or holiday clubs, and can also be used in conjunction with the 15- or 30-hours free childcare.
Eligibility
Families could be eligible for Tax-Free Childcare if they:
- have a child or children aged 11 or under. They stop being eligible on 1 September after their 11th birthday. If the child has a disability, parents 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
A full list of the eligibility criteria is available on GOV.UK.
How to claim
If parents have more than one eligible child, they each require their own Tax-Free Childcare account, and the government top-up is then applied to deposits made for each child (rather than per household). A pre-requisite is that account holders must confirm their details are up to date every three months to continue receiving the government top-up.
To apply for Tax-Free Childcare, click here to open a childcare account.
Get in touch
If you have any questions about Tax-Free Childcare, or any other tax saving measures your family could potentially benefit from, get in touch with the PM+M tax team by emailing enquiries@pmm.co.uk.
