Families urged to use Tax-Free Childcare accounts

Families urged to use Tax-Free Childcare accounts

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Thousands of families across the UK are missing out on a government childcare top-up worth up to £500 every three months, according to HMRC.

Almost 248,000 families across the UK saved money using Tax-Free Childcare in December 2020, an increase of almost 43,000 families from December 2019.

Tax-Free Childcare allows parents or carers who have children aged up to 11, or 17 if their child is disabled, to pay their childcare provider through the scheme, and receive a 20% government top-up on any money deposited.

For every £8 per child a parent or carer deposits, they will receive £2 in top-up, up to the value of £500 every three months, or £1,000 if their child is disabled. That equals £2,000, or £4,000 for the care of a disabled child, for a whole year. The top-up is paid directly into the child’s account and is ready to use almost instantly.

Myrtle Lloyd, HMRC’s Director General for Customer Services, said: “As children return to their schools, after-school clubs and nurseries, help is available towards the cost of childcare.

“Families using Tax-Free Childcare to pay their childcare provider are already benefiting from the 20% government top-up on deposits, and you could too. To find out more search ‘tax-free childcare’ on GOV.UK.”

Tax-Free Childcare is also available to families with pre-school aged children attending nurseries, childminders or other childcare providers. Parents and carers can check their eligibility and register for Tax-Free Childcare via GOV.UK.

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