UK households are being issued an urgent warning from HMRC and the Labour government to check if they are missing out on significant financial support for childcare. The call to action highlights that eligible families could be entitled to up to £2,000 per year for each child through the Tax-Free Childcare scheme.
What is Tax-Free Childcare and Who Qualifies?
The scheme is designed to help working parents with the cost of approved childcare. For every £8 you pay into an online childcare account, the government will add £2, up to a maximum of £2,000 per child per year (£500 per quarter). For children with disabilities, this support rises to £4,000 annually (£1,000 every three months).
To be eligible, your household must meet specific criteria. The combined annual income for a couple must be under £100,000. Furthermore, over the next three months, each parent or partner must expect to earn a minimum amount. This earnings threshold is:
- £2,539.68 before tax for those aged 21 and over.
- £2,080 before tax for those aged 18 to 20.
- £1,570.40 before tax for those under 18 or an apprentice.
Generally, you and your partner need to be in work, on annual or sick leave, or on certain types of parental leave. Even if you are not working, you may still qualify if your partner works and you receive benefits such as Incapacity Benefit or Carer's Allowance.
How to Claim Your Childcare Support
Accessing the funds is straightforward. Families need to set up an online childcare account for their child. This account is then used to pay your registered childcare provider directly, with the government adding its 25% top-up.
It is important to note that this scheme can be used alongside the 30 hours of free childcare offer for working parents, provided you meet the separate eligibility conditions for both programmes. This combination can provide a substantial reduction in overall childcare costs for qualifying families.
HMRC has taken to social media platform X to raise awareness, directly asking parents: "Could you be missing out on childcare savings?" With many families facing financial pressure, this reminder serves as a crucial prompt to investigate a support mechanism that could put thousands of pounds back into household budgets.
