New Tax-Free Childcare statistics from HM Revenue and Customs
(HMRC) have revealed that 512,415 families received up to £2,000
towards the cost of their childcare during the 2021 to 2022 tax
year, up from 374,135 in the previous year.
Tax-Free Childcare provides thousands of eligible working
families with vital financial support towards the cost of their
childcare with the government paying £240 million annually in
top-up payments to families using the scheme.
For thousands of families who use Tax-Free Childcare, the money
they save each month on their childcare costs is money that goes
back into their pockets.
For every £8 paid into a Tax-Free Childcare online account,
families will automatically receive an additional £2 in
government top-up, and it is available for children aged up to
11, or 17 if the child has a disability.
Families receive up to £500 every 3 months, per child, or £1,000
if their child is disabled, helping towards the cost of before
and after-school clubs, childminders and nurseries, holiday clubs
and other approved childcare schemes.
But hundreds of thousands of families could be missing out, with
recent research published by HMRC estimating that about 1.3
million families could be eligible for this government support.
Parents and carers are being urged to check their eligibility and
register for Tax-Free Childcare
via GOV.UK.
Myrtle Lloyd, HMRC’s Director General for Customer Services,
said:
Tax-Free Childcare can make a big difference to families, helping
with the bills for things like nurseries, childminders and after
school clubs. It’s easy to register – search ‘Tax-Free Childcare’
on GOV.UK.
, HM Treasury’s Exchequer
Secretary to the Treasury, said:
It’s fantastic that more parents are taking up Tax-Free
Childcare. This support provides a helping hand with childcare
costs for working families.
With over one million families eligible, I want to encourage
parents to take advantage of Tax-Free Childcare and keep the
extra pounds in their pocket.
The latest monthly comparisons also show that a record number of
families were using their Tax-Free Childcare account in March
2022 – 384,280 families compared to 282,230 in March 2021 – an
increase of 102,050 families.
The scheme offers a 20% government funded top-up on money
deposited into Tax-Free Childcare accounts, which can be used to
pay their childcare provider. Accounts can be opened at any time
of the year and can be used straight away, and money can be
deposited at any time and used when needed.
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. Any unused money that is deposited can
be simply withdrawn at any time.
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
via GOV.UK to receive payments from parents and carers via
the scheme.
Further information
For more information about Tax-Free Childcare.
For more information about government childcare offers.
Parents and carers could be eligible for Tax-Free Childcare if
they:
- have a child or children aged up to 11. They stop being
eligible on 1 September after their 11th birthday. If their child
has a disability, they may get up to £4,000 a year until they are
17
- earn, or expect to earn, at least the National Minimum Wage
or Living Wage for 16 hours a week, on average
- each earn under £100,000 per annum
- do not receive tax credits, Universal Credit or childcare
vouchers
Latest Tax-Free Childcare
statistics were released on 25 May 2022. Data is available up
to March 2022 and also gives regional breakdown figures.
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.
