HM Revenue and Customs (HMRC) is making a direct appeal to working families across the UK, urging those with an income under £100,000 to check their eligibility for a significant financial benefit that could save them up to £2,000 per child each year.
What is Tax-Free Childcare?
In a recent social media campaign, the tax authority highlighted the often-overlooked Tax-Free Childcare scheme. This government initiative is designed to provide substantial financial support to parents struggling with the high costs of approved childcare.
Through the scheme, for every £8 a parent deposits into a dedicated online account, the government will add £2. This means families can receive up to £500 every three months for each child, which adds up to a maximum of £2,000 annually. The support is even greater for parents of disabled children, who can receive up to £4,000 a year.
Who is Eligible for the Support?
To qualify for this financial help, applicants must meet several key criteria. You, and your partner if you have one, must be at least 16 years old and living in the UK. Crucially, your adjusted net income must be less than £100,000 per year.
Furthermore, you must be in qualifying paid work and expect to earn, on average, at least the equivalent of 16 hours per week at the National Minimum or Living Wage over the coming three months. The scheme is not available to those currently receiving Universal Credit or Childcare Vouchers.
Eligible children can benefit from the scheme until the 1st of September following their 11th birthday, or until their 16th birthday if they are disabled.
How to Apply and Use the Scheme
Applying for the support is managed through an online account. Once registered, parents can search for childcare providers in their area and, if the provider is already signed up, add them to the account and start payments immediately.
If a chosen provider is not yet registered with the scheme, the system allows parents to send them a 'nudge' notification to encourage them to join. A crucial step for recipients is to reconfirm their eligibility every three months, a process for which HMRC sends a reminder.
It is also important to note that Tax-Free Childcare can be claimed alongside the 30 hours of free childcare for working parents, offering a combined and substantial reduction in overall childcare expenses.
