Tax-Free Childcare is available to working families to help them save on their childcare costs. However, many may not be making use of this provision and with the Easter break soon upon us, HM Revenue & Customs (HMRC) is encouraging families who have not yet signed up to consider doing so.
Tax-Free Childcare can be worth up to £2,000 annually per child, or £4,000 if the child is disabled. It can be used to help pay for approved childcare for children aged 11 and under, or 16 and under if they have a disability.
The way it works is that the parents first apply for a childcare account. Once the account is opened, the parents can deposit money that will be used to pay for childcare. Where eligible, for every £8 paid into the account, the government will pay in £2 to use to pay the childcare provider.
To be eligible for Tax-Free Childcare a family has to:
- Have a child aged 11 or under, or 16 and under if they have a disability.
- Be earning at least the National Minimum Wage for 16 hours a week, on average.
- Each earn no more than £100,000 a year.
- Not be receiving tax credits, Universal Credit or childcare.
Employed, self-employed, and directors can all apply, and HMRC set out what details parents need to provide to confirm eligibility.
From April 2024, there is also the possibility for eligible working parents to access 15 hours free childcare for 38 weeks a year that can be used flexibly with one or more providers.
This scheme will be further expanded in September 2024 and again in September 2024 so that ultimately 30 free hours of childcare could be available for working parents with children between nine months old and school age.
To apply for Tax-Free Childcare, please see:
The Competition and Markets Authority (CMA) has published proposals to overhaul how the veterinary market works. While this review focuses on vet businesses, its findings provide some useful insights for businesses of all types - particularly around transparency, communication, and customer confidence.
Running your own business often means juggling a lot - and for many, that includes childcare. With autumn school breaks rapidly approaching, HMRC is reminding working families that the Tax-Free Childcare scheme can be a good way to make some savings.
.gif)