Tax-free childcare account push as HMRC tells families they could save £2000 a year on bills
Register for free to read more of the latest local news. It's easy and will only take a moment.
FAMILIES could save up to £2000 per annum on yearly childcare bills by opening a tax-free account, says HMRC.
HM Revenue and Customs (HMRC) is reminding families to open a Tax-Free Childcare account to help save on bills.
Families can use their Tax-Free Childcare account to pay for any approved childcare including holiday clubs, breakfast and after school clubs, child minders and nurseries.
The scheme provides working families, with children up to the age of 11, or 16 if their child has a disability, up to £2000 a year per child, or £4000 a year if their child is disabled.
For every £8 paid into a Tax-Free Childcare account, families automatically receive the UK Government top up of £2. Families can save up to £500 every three months for each child or £1000 if their child is disabled.
Myrtle Lloyd, HMRC’s director general for customer services, said: “Arranging childcare can be costly for working families. Tax-Free Childcare offers financial help so families can save on the cost of childcare. Search Tax-Free Childcare on GOV.UK and sign up online today.”
She says opening a Tax-Free Childcare account online is straightforward and can be done in about 20 minutes. Money can be deposited at any time, 365 days a year, to be used straight away or left in the account and used whenever it is needed. Unused money in the account can be withdrawn at any time.
The UK Government says it is offering help for households. Check GOV.UK to find out what cost of living support is available, including help with childcare costs.
Overview of who can qualify
Parents and carers could be eligible for Tax-Free Childcare if they:
have a child or children aged up to 11. They stop being eligible on 1 September after their 11th birthday. If their child is disabled, they may get up to £4,000 a year until 1 September after their 16th birthday
earn, or expect to earn, at least the National Minimum Wage or Living Wage for 16 hours a week, on average
each earn no more than £100,000 per annum
do not receive tax credits, Universal Credit or childcare vouchers
HMRC has produced a Tax-Free Childcare guide for parents, which explains the reasons and benefits for signing up to the scheme.
