HM Revenue and Customs (HMRC) has reminded working parents to check if they qualify for Tax-Free Childcare, which could provide up to £2,000 per child each year. In a social media post, the department highlighted that the scheme covers term-time care and holiday clubs, with thousands of providers accepting it.
The scheme works by parents paying into an online childcare account, with the government adding £2 for every £8 deposited. This means up to £500 every three months per child, or £2,000 annually. For children with disabilities, the limit rises to £1,000 per quarter, up to £4,000 per year.
Eligibility requires both parents (if in a couple) to be working, each earning at least the National Minimum Wage for 16 hours a week on average over the next three months. Self-employed parents who started their business less than a year ago can earn less and still qualify. However, if either parent has an adjusted net income of £100,000 or more in the current tax year, they are not eligible.
Parents who are not working may still qualify if their partner is working and they receive certain benefits, such as Carer’s Allowance or incapacity benefits. Tax-Free Childcare can also be claimed alongside the 30 hours of free childcare for working parents, provided the conditions for both schemes are met.
HMRC encouraged parents to visit the Government website to check their eligibility and set up an online childcare account if they qualify.
