- Working families urged to sign up for Tax-Free Childcare on Playday to help pay for holiday clubs, after-school clubs, nurseries and childminders
- Latest statistics show families save almost £100 a month with Tax-Free Childcare
- Number of families using Tax-Free Childcare for children aged 8 and above increased by 20%
Working families are being encouraged to check if they could cut the cost of childcare this Playday (5 August), as HM Revenue and Customs’ (HMRC) latest statistics show families using Tax-Free Childcare saved an average of almost £100 a month.
Playday, the national day for play, is a reminder for eligible parents to see if they could benefit from the scheme. Tax-Free Childcare can provide up to £2,000 per year per child (or £4,000 for a disabled child) helping manage childcare costs while balancing work and family life.
People can visit GOV.UK to check eligibility and sign-up for Tax-Free Childcare.
Once families have signed up, they can receive a £2 government top-up for every £8 they deposit into their account. Families can open an account for each of their children aged up to 11 and, if they have a disabled child, aged up to 16.
It can be used to pay for any approved childcare including nurseries, childminders, holiday clubs, breakfast clubs and after-school clubs. Almost 75,000 providers are now signed up to receive Tax-Free Childcare payments.
While the majority of families who use the scheme have younger children, recent statistics show the number of families using it to pay for childcare for children aged 8 and above increased by more than 20% compared to the previous year.
Myrtle Lloyd, HMRC’s Chief Customer Officer, said:
“Tax-Free Childcare can help with your summer childcare plans and, looking to the term ahead, with whatever type of care you require for your child. If you haven’t signed up already, do it today so you don’t miss out. Go to GOV.UK and search ‘Tax-Free Childcare’.”
Families can receive up to £500 worth of top-up money, or £1,000 for a disabled child, every 3 months.
Once families have opened a Tax-Free Childcare account, they can deposit money and use it straight away or keep it in their account to use it whenever it’s needed. Unused money can be withdrawn at any time.
Families could be eligible for Tax-Free Childcare 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 can receive up to £4,000 a year until 1 September after their 16th birthday
- the parent and their partner (if they have one) 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 Universal Credit or childcare vouchers
Tax-Free Childcare can be used alongside the government funded childcare hours, subject to eligibility.
