Parents fretting about childcare during the school holidays are being reminded that they can save up to £2,000 a year on those costs with Tax-Free Childcare (TFC).
Now as half term approaches in February, parents are being urged by HM Revenue & Customs (HMRC) to find out more about TFC and check their eligibility via Childcare Choices.
TFC can help working families pay for any approved childcare for children aged 11 or under, or, 16 if the child has a disability – whether the child goes to nursery, a childminder, attends breakfast or after school club, has holiday care or goes to an out of school activity.
Can I claim the benefit?
Families could be eligible for TFC if they:
- Have a child or children aged 11 or under. They stop being eligible on 1 September after their 11th birthday
- If their child has a disability, 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 earns no more than £100,000 per annum
- Do not receive tax credits, Universal Credit or childcare vouchers.
Self-employed parents can get support with childcare costs using the TFC scheme, unlike the employer-supported childcare scheme.
The Government has introduced a ‘start-up’ period during which a newly self-employed parent will not have to earn the minimum income level.
How does the system work?
For every £8 paid into an online account, families will automatically receive an additional £2 from the Government. Parents can receive up to £500 every three months, or £1,000 (£4,000 a year) if their child is disabled.
Money can be deposited through a special Tax-Free Childcare account, which can be opened in around 20 minutes and can be used immediately.
Unused money in the account can be withdrawn at any time.
Families can learn more about the childcare offers available to them and what support they’re entitled to by visiting Childcare Choices.
For help and advice on related matters, please contact our team today.