Posted: Thu 31st Aug 2023

HMRC urges families to boost their back-to-school budget with Tax-Free Childcare

News and Info from Deeside, Flintshire, North Wales
This article is old - Published: Thursday, Aug 31st, 2023

As the new school term is about to commence, HM Revenue and Customs (HMRC) is encouraging families across the UK to open a Tax-Free Childcare account to save up to £2,000 per child annually on childcare expenses.

The Tax-Free Childcare scheme is available for working families with children up to 11 years old, or up to 16 years old if the child has a disability.

The scheme allows families to receive up to £2,000 a year per child, or £4,000 a year if the child is disabled.

For every £8 paid into a Tax-Free Childcare account, the government automatically adds a top-up of £2.

This means families can save up to £500 every three months for each child or £1,000 if their child is disabled.

Myrtle Lloyd, HMRC’s Director General for Customer Services, emphasized the importance of the scheme, stating, “Starting back to school and arranging childcare for the term ahead 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.”

Opening a Tax-Free Childcare account online is simple and can be completed in approximately 20 minutes.

Money can be deposited at any time throughout the year and can be used immediately or saved for later use. Additionally, unused funds in the account can be withdrawn at any time.

To register and start saving today, visit GOV.UK. The government is offering various cost of living support options, including help with childcare costs.

Eligibility for Tax-Free Childcare: Parents and carers may be eligible for Tax-Free Childcare if they:

  • Have a child or children aged up to 11, or up to 16 if the child is disabled.
  • 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 also produced a Tax-Free Childcare guide for parents, explaining the benefits and reasons for signing up for the scheme.

It is important to note that each eligible child requires their own Tax-Free Childcare account.

If a family has more than one eligible child, they will need to register an account for each child.

The government top-up is then applied to deposits made for each child, not the household.

Account holders must confirm their details are up to date every three months to continue receiving the government top-up.

Childcare providers can also sign up for a childcare provider account via GOV.UK to receive payments from parents and carers through the scheme.

 

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