Millions of families risk seeing payments stop
Millions of UK households could reclaim up to £2,000 from HM Revenue and Customs (HMRC) this year, though the scheme comes with a three-month warning. The tax authority operates a programme that means many earning under £100,000 may qualify for the government assistance.
Tax-Free Childcare functions by helping families reduce expenditure on childcare costs for working parents. Alongside earning below the threshold mentioned, you’ll qualify if you have a child aged under 11, or 16 if your child has a disability.
You can utilise the discount to cover school clubs, childminders and other wraparound care. It’s valued at up to £2,000 per child annually, or up to £4,000 if your child is disabled.
After registering for tax-free childcare, the government will add £2 for every £8 you deposit into your online account. As outlined on Gov.uk: “You can get Tax-Free Childcare at the same time as 15 or 30 hours free childcare if you’re eligible for both” and it further clarifies that this benefit extends to various childcare services including after-school clubs, childminders, nurseries, and nannies.
The childcare provider must be enrolled in the scheme for you to process payments and claim the top-ups. For parents of disabled children, the additional funds from Tax-Free Childcare can be utilised to pay for extra childcare hours and to assist providers in obtaining specialised equipment required by your child, such as mobility aids.
Your eligibility for tax-free childcare hinges on several factors including your employment status, earnings, your child’s age and situation, and your immigration status. According to HMRC, you can generally access the scheme if you’re in employment, on sick or annual leave, or on shared parental, maternity, paternity or adoption leave, and you’re returning to work within 31 days of the date you first applied.
Even if you’re not presently in employment, you may still qualify if your partner is working and you receive Severe Disability Allowance, Incapacity Benefit, Carer’s Allowance, Carer Support Payment (Scotland only) or contribution-based Employment and Support Allowance.
Nevertheless, whatever your situation, if you wish to continue claiming, you must confirm your details are current with HMRC every three months. Failure to do so will result in the government ceasing any payments into your Tax-Free Childcare account.
