As school holidays approach, HMRC is urging working parents to check if they qualify for Tax-free childcare benefits.
Families Urged to Sign Up for Tax-Free Childcare Before Easter Break
With the Easter break right around the corner, households that haven't signed up yet for Tax-free Child Care could miss out on the opportunity to amass up to £2000 of annual savings per child, or £4000 if one of their children is disabled.
Tax-free childcare can provide financial support for approved children aged 11 or under, or up to 16 if a child suffers from a disability.
HM Revenue and Customs (HMRC) recently announced that parents are eligible to receive financial help starting from £500 per child to £4000 for disabled children every three months. This implies that the government will automatically top up their online account with an extra £2 for every £8 deposited into it.
Myrtle Lloyd, HMRC’s director general for customer services, remarked: “Springtime is a good opportunity to take a fresh look at family finances. A quick check online and you can find out how Tax-Free Childcare can help cut the cost of your childcare bills.
“Every bit of financial support helps – I would urge families to 'hop to it’ and search ‘Tax-Free Childcare’ on GOV.UK to find out how you could be better off and open your account today.”
The director urges parents to do a quick search online, which takes only a couple of minutes, to apply for a Tax-free Childcare account that can be used to help pay for different services, including after-school activities, nursery, childminders, and holiday clubs.
The support can also be used in conjunction with the 15- or 30-hour free daycare program and to assist in covering the cost of any specialized equipment disabled children need to attend daycare.
Once the creation of an account is fulfilled, parents can make deposits right away; it is, as a result, easy to use and accessible at any time. In addition, unused money in the account can be withdrawn at any given moment.
Who can Benefit from Tax-free Childcare?
Parents can benefit from Tax-free Childcare if they have a child or children that are 11 years of age or younger. Families stop being qualified for financial support on September 1st, after their child turns 11. However, if the child is disabled, they stop being eligible on September 1st, after their child turns 16.
People should earn no less than the National Minimum Wage or Living Wage for approximately 16 hours of work per week.
In addition, applicants' annual income should not exceed £100,000, and they should not be getting any other financial support, including Universal Credit, Tax Credit, or childcare coupons.
The complete list of requirements for eligibility can be found on GOV.UK.
Beginning in April 2024, qualifying working parents with children under two years old can also sign up for 15 hours of free childcare each week.
By September 2025, the free childcare program will be extended to thirty hours for working parents whose children are nine months old until the time they enter school. By using all thirty hours, parents can save up to £6,900 annually.
Families can visit the Government's Childcare Choices website to find out more about the childcare options that are accessible to them and what could work for their family.