HMRC has urged families to sign up for Tax-Free Childcare before Halloween, a scheme that could see the government provide top-ups of up to £2,000 a year per child. New figures from HMRC show working families could save up to £2,000 for each child under 11, or £4,000 annually for disabled children up to age 16, by enrolling in the scheme. For every £8 deposited by parents into the account, the government contributes £2.
How the scheme works
Parents can receive up to £500 every three months, or £1,000 for disabled children. The funds can be used for approved childcare costs, including nursery fees, school clubs, and clubs that run outside term time. Eligible costs also cover childminders, nurseries, nannies, after-school clubs, breakfast clubs, and holiday clubs. Extras such as nappies, meals, and trips can be paid for if supplied by the childcare provider.
Eligibility criteria
Families may qualify if they have a child aged 11 or under, with eligibility ending on 1 September after the child's 11th birthday. For disabled children, support continues until 1 September after their 16th birthday. Parents and their partners must earn at least the National Minimum Wage or Living Wage for 16 hours a week on average, and each must earn no more than £100,000 per year. Those receiving Universal Credit or childcare vouchers are not eligible.
Myrtle Lloyd, HMRC's chief customer officer, said: "Paying for childcare while you work doesn't have to be a nightmare for your bank balance this Hallowe'en. Tax-Free Childcare can make a real difference. Go to GOV.UK to find out more today."
Approved providers required
Families must use an 'approved childcare' provider, which includes registered childminders, nannies, playschemes, nurseries, clubs, registered schools, or home care workers employed by a registered home care agency. The scheme is intended to help working families manage childcare costs more effectively.
