Tax-free childcare, are you missing out?
Childcare costs keep climbing, and many working families feel the strain every month. However, help is available, and too many parents overlook it. Therefore, it is worth asking: Tax-free childcare, are you missing out?
How the scheme works
The Tax-Free Childcare scheme helps eligible parents pay for registered childcare. Essentially, the government tops up the money you contribute. For every £8 you pay into your childcare account, the government adds £2. As a result, your childcare budget stretches further each month.
Moreover, you can use this support to pay a wide range of approved providers. These include:
- Childminders
- Nurseries
- Nannies
- After-school clubs
- Holiday clubs
How much you can receive
The government caps its contribution at £500 every three months. Consequently, you can receive up to £2,000 a year per child. Furthermore, families raising a child with disabilities receive more. In these cases, the maximum rises to £1,000 every three months, or £4,000 a year.
Who can apply
Fortunately, the scheme supports many working parents, including those who are self-employed. Usually, you must work, or return to work, and earn a minimum amount. Specifically, you need to earn the equivalent of the National Minimum Wage or Living Wage for 16 hours weekly. In addition, parents on maternity, paternity or adoption leave can still qualify.
Children generally remain eligible until 1 September after their 11th birthday. However, disabled children qualify until 1 September after their 16th birthday.
Important restrictions to note
Nevertheless, some limits apply, so check them carefully. You cannot usually claim if you or your partner expects an adjusted net income above £100,000 a year. Likewise, you cannot claim while receiving Universal Credit or childcare vouchers. Finally, you must set up a childcare account. Then, you must sign in every three months to confirm your eligibility.
Take action today
So, Tax-free childcare, are you missing out? Do not leave valuable support unclaimed. Instead, set up your childcare account today and start saving on registered childcare straight away.
