Families can receive a government top-up worth up to £2,000 a
year towards the cost of childcare by signing up to Tax-Free
Childcare.
Thousands of working families in the UK could be missing out on
an opportunity to get up to £2,000 a year to help with the cost
of childcare, HM Revenue and Customs (HMRC) is reminding parents, ahead
of February half term.
Tax-Free Childcare – the 20% childcare top-up – provides eligible
working families with up to £500 every 3 months (or £1,000 if
their child is disabled) towards the cost of holiday clubs,
before and after-school clubs, childminders and nurseries, and
other accredited childcare schemes.
Nearly 316,000 working families used Tax-Free Childcare across
the UK in September 2021, receiving a share of £35 million in
government top-up payments towards their childcare costs – an
increase of about 90,000 families compared to September 2020.
Tax-Free Childcare 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.
This scheme is one of many ways the government is supporting
households to raise their incomes and keep more of what they
earn.
Parents and carers can check their eligibility and register for Tax-Free Childcare
via GOV.UK.
Myrtle Lloyd, HMRC’s
Director General for Customer Services, said:
The 20% government top-up offers working families help to pay for
childcare, whether it’s nursery bills, after school clubs or
holiday clubs. Search ‘Tax-Free Childcare’ on GOV.UK to find out
more.
, Exchequer Secretary to the
Treasury, said:
Whether it’s for holiday clubs, breakfast clubs, or childminders
and nurseries, Tax-Free Childcare is a great offer that gives
working parents a helping hand with their childcare costs.
This Government is committed to supporting working families which
is why it’s fantastic that thousands more are saving money
through the Tax-Free Childcare scheme. I urge as many parents as
possible to take advantage of this support.
By depositing money into their accounts, families can benefit
from the 20% top-up and use the money to pay for childcare costs
when they need it. Accounts can be opened at any time of the year
and can be used straight away.
For example, if parents and carers have school-aged children and
use holiday clubs during school holidays, they could deposit
money into their accounts throughout the year. This means they
could spread the cost of childcare while also benefitting from
the 20% government top-up.
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 accountvia GOV.UK to receive payments from parents
and carers via the scheme.
Further information
More information about Tax-Free Childcare.
Latest Tax-Free Childcare
statistics were released on 17 November 2021. Data is
available up to 30 September 2021.
HMRC has produced a
refreshed Tax-Free
Childcare guide for parents, which explains the reasons and
benefits for signing up to the scheme.
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 20% 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.
