HMRC is reminding parents that they may be eligible for Tax-Free Child care (TFC). This is to help pay for Easter school holidays childcare costs.
Benefits of Tax-Free Child care Scheme
The TFC scheme can help parents of children aged up to 11 years old (17 for those with certain disabilities). The Tax Free Child care scheme helps support working families with their childcare costs. There are many registered childcare providers including childminders, breakfast and after school clubs and approved play schemes signed up across the UK. Parents can pay into their account regularly. This means the can save up their TFC allowance to use during school holidays.
The TFC scheme provides for a government top-up on parental contributions. For every £8 contributed by parents an additional £2 top up payment will be funded by Government. However, only up to a maximum total of £10,000 per child per year. This will give parents an annual savings of up to £2,000 per child (and up to £4,000 for disabled children until the age of 17) in childcare costs.
Eligibility and Application Process
The Tax Free Child care scheme is open to all qualifying parents. It includes the self-employed and those on a minimum wage. The scheme is also available to parents on paid sick leave as well as those on paid and unpaid statutory maternity, paternity and adoption leave. In order to be eligible to use the scheme parents will have to be in work at least 16 hours per week and earn at least the National Minimum Wage or Living Wage. If either parent earns more than £100,000, both parents are unable to use the scheme.
HMRC’s Director General for Customer Services, said:
‘Springtime is a good opportunity to take a fresh look at family finances. A quick check online and you can find out how Tax-Free Child care can help cut the cost of your childcare bills. Every bit of financial support helps – I would urge families to ’hop to it’ and search ‘Tax-Free Child care’ on GOV.UK to find out how you could be better off and open your account today.
