HMRC is urging millions of UK households to claim a handout valued at £2,380 before the looming Saturday deadline.
HMRC Urges Parents to Apply for Tax-Free Childcare by Saturday to Secure Next Term’s Support
Parents with children can apply for free childcare through the Tax-Free Childcare scheme. The code must be obtained by this Saturday, August 31, to secure the handout for the next school term. If the next term for your child starts in September, whether at school or nursery, it’s important to apply for childcare cost support by Saturday. HMRC warns that it can take up to seven days to confirm eligibility, so it's important to apply quickly to avoid missing out on the handout.
Any parent with a child who turns nine months old between April 1 and August 31 this year, or who turns three during the same period, needs to act now. Additionally, anyone who has gone back to work or started a new job before September 30, 2024, must also submit an application by August 31 to receive the money.
How Tax-Free Childcare Reduces Nursery Costs with Government Subsidies and Free Hours
If you're looking to make childcare more affordable, here's a simple breakdown of how the Tax-Free Childcare scheme: The government sets up a childcare costs account that’s linked to your chosen nursery. The nursery then lowers the amount it charges you based on the funds it receives from the government.
For children aged between nine months and two years, families receive 15 free hours of childcare. Once a child reaches the age of three, the free hours increase to 30 per week. For every £8 contributed to the account, the government adds an extra £2. This means that if you spend £10,000 on nursery fees, the amount you actually pay out of pocket will be reduced to £8,000 due to the 20 percent subsidy provided by the government.
How Do You Apply for Tax-Free Childcare and Manage Your Account?
To get the Tax-free Childcare, you have to sign up online at gov.uk/apply-for-tax-free-childcare. A child's account can only be held by one parent, regardless of whether they reside together. You then put funds into your online tax-free daycare account by bank transfer. The additional funds you received from the government will be credited to your account within three working days.
Then you can make a payment straight to your childcare provider, as long as they are on the approved list (Ofsted-registered providers should be eligible). You will also be required to reaffirm your eligibility online every three months; if you miss this time, your top-up payments will be suspended until you reconfirm.