HUNDREDS of thousands of parents could be missing out on up to £2,000 in childcare every year – here’s how to claim.
That adds up to a maximum of £2,000 a year – rising up to £4,000 a year if your child has disability.
More than 512,000 families used the scheme in the 2021-22 tax year, according to latest figures from HMRC.
This was up from 374,000 in the previous year.
But hundreds of thousands of families could be missing out, with recent research by HMRC estimating that about 1.3 million households could be eligible for this scheme.
Helen Whately, Exchequer Secretary to the Treasury, said: “It’s fantastic that more parents are taking up Tax-Free Childcare. This support provides a helping hand with childcare costs for working families.
“With over one million families eligible, I want to encourage parents to take advantage of Tax-Free Childcare and keep the extra pounds in their pocket.”
For every £8 paid into a Tax-Free Childcare online account, families will automatically receive an additional £2 in government top-up, and it is available for children aged up to 11, or 17 if the child has a disability.
Parents and carers are being urged to check their eligibility and register for Tax-Free Childcare via GOV.UK.
Myron Jobson, senior personal finance analyst at interactive investor, said: “Parents scrambling for ways to reduce their childcare bill amid the once in a generation type fall in living standards have most likely contributed to an uptick in usage of the scheme.
“But the uptake of the scheme continues to fall far below original estimates. Greater and more creative promotion of the initiative is needed as a large proportion of parents were unaware of its existence.”
We explain who is eligible for the help and how to apply.
Who can get the help?
Your child must be aged under 11, which rises to 17 if they have a disability, to use the scheme – and there is other eligibility criteria you have to hit too.
You can usually get the help if you – and your partner, if you have one – are in work, on sick leave or annual leave, or are on shared parental, maternity, paternity or adoption leave.
If you’re not working, you may be eligible for the help if you get one of the following benefits, and if your partner is still working:
- Incapacity Benefit
- Severe Disablement Allowance
- Carer’s Allowance
- Contribution-based Employment and Support Allowance
You are also expected to earn over a certain amount over the next three months too.
You’re expected to earn at least £1,853.28, which is the National Living Wage for those over 23. Your partner must earn this too.
It’s important to note you cannot get tax-free childcare at the same time as claiming Working Tax Credit, Child Tax Credit, Universal Credit or childcare vouchers.
How do I apply?
You’ll need to apply on the gov.uk website to set up an online account to start claiming the help.
You will need some personal information to hand – and your partner’s too if you have one – including your National Insurance number or Unique Taxpayer Reference number if you are self-employed.
In your application, you will be assessed to see if you are eligible for the help, which can take up to seven days.
It takes 20 minutes to apply, so make sure you have some spare time for the application process.
If you are successful, you will have set up your own online account.
How it works is that for every £8 you pay into the account, the government will chip in £2 to pay to your childcare provider.
Other than the Tax-Free Childcare scheme, you should also check if you are eligible for child care credits, the Sure Start grant or child benefits.
Struggling families can also apply for free cash to help with bills, supermarket shops and more using the Household Support Fund.
We pay for your stories!
Do you have a story for The Sun Online Money team?