HM Revenue and Customs (HMRC) has issued a message urging UK parents to check whether they may be eligible for up to £2,000 per child
Brits have been advised to verify whether they’re eligible for as much as £2,000 in annual assistance.
HM Revenue and Customs (HMRC) has prompted parents to determine if they might be entitled to financial support towards childcare costs. In a post shared on X, HMRC stated: “No need to hunt for egg-cellent childcare savings this Easter. Working parents could get up to £2,000 a year per child with Tax-Free Childcare. From term-time care to holiday clubs, thousands of providers accept it.”
However, this funding is not available if you or your partner earns £100,000 a year or more. Those satisfying the requirements can obtain up to £500 each quarter for every child to help cover childcare costs. This totals up to £2,000 annually.
The Government website explains that this rises to £1,000 per quarter if a child is disabled (up to £4,000 yearly). To claim these funds, referred to as tax-free childcare, families need to set up an online childcare account for their child.
For each £8 paid into this account, the government adds £2 to settle payments with your childcare provider. Tax-free childcare can be accessed alongside 30 hours of free childcare via Free Childcare for Working Parents if you satisfy the conditions for both programmes.
What tax-free childcare can cover
It can be used to pay for approved childcare, including:
- Childminders, nurseries and nannies
- After school clubs and play schemes
If your child is disabled, the additional tax-free childcare funds you receive can be used to cover extra hours of childcare. These funds can also be utilised to pay your childcare provider for specialist equipment needed by your child, such as mobility aids.
Who qualifies?
Typically, you’re eligible for tax-free childcare if you (and your partner, if applicable) are:
- Employed
- On sick leave or annual leave
- On shared parental, maternity, paternity or adoption leave
Even if you’re not currently employed, you may still qualify if your partner is working and you receive any of the following:
- Incapacity Benefit
- Severe Disablement Allowance
- Carer’s Allowance or (only in Scotland) Carer Support Payment
- Contribution-based Employment and Support Allowance
Over the forthcoming three months, both you and your partner (if you have one) must each anticipate earning at least:
- £2,643.68 before tax if you’re aged 21 or over (the same as £203.36 per week)
- £2,256.80 before tax if you’re aged 18 to 20 (the same as £173.60 per week)
- £1,664 before tax if you’re under 18 or an apprentice (the same as £128 per week)
If you’re self-employed and started your business less than a year ago, you can earn less and still qualify for tax-free childcare. If you hold more than one job, you can use your total earnings to determine if you meet the threshold.
This includes:
- Earnings from any employment
- Earnings from any self-employment
However, it’s crucial to understand that if you or your partner have an expected “adjusted net income” exceeding £100,000 in the current tax year, you will not qualify.
For further details, visit the Government website here.
