Families are being urged to sign up for tax-free childcare worth up to £2,000 a year ahead of the October half term. The scheme lets parents pay money into an online account, with the government adding extra contributions.
For every £8 paid in, the government contributes £2. Parents can receive up to £500 every three months — £2,000 a year — for each child. For disabled children, the maximum is £1,000 every three months, or £4,000 a year.
Latest take-up figures
The latest figures show 601,620 families received a share of £55.7 million in government top-ups in June, with each family getting an average of £93 added to their account.
To be eligible, a child must be aged 11 or under and usually live with the parent. Parents must also be earning at least the minimum wage for 16 hours a week on average.
Who cannot apply
A tax-free childcare account cannot be opened if the parent or their partner has an adjusted net income above £100,000. For those self-employed for less than 12 months, there is no minimum income requirement.
There are some circumstances where parents not in work can claim — for example, if they are on sick leave or parental leave. In a couple where one person is working, the other may qualify if they receive Incapacity Benefit, Severe Disablement Allowance, Carer’s Allowance, contribution-based Employment and Support Allowance or National Insurance credits.
The money must be spent on a registered childcare provider, such as nurseries, nannies, after school clubs and play schemes. The account can be used until September 1 after the child’s 11th birthday, or for disabled children, until September 1 after their 16th birthday.
HMRC comment and other support
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."
Other support is also available. Parents of three to four year olds can get 15 hours a week free childcare, rising to 30 hours a week for children aged between four months and four years old if the parent is in work. Those claiming Universal Credit and working can claim back up to 85% of childcare costs, up to a maximum of £1,071.09 for one child or £1,836.16 for two or more children.
