Back to school? HMRC can help with childcare costs

As children return to school after summer holidays, HM Revenue and Customs (HMRC) is reminding families who may be missing out on Tax-Free Childcare to register.

Tax-Free Childcare puts more money back in the pockets of working families by providing much needed financial support towards the cost of childcare for children aged 11 or under, or up to 17 if the child has a disability. For every £8 paid into a Tax-Free Childcare online account, families will automatically receive an additional £2 in government top-up.

Families receive up to £500 every three months (£2,000 a year) per child, or £1,000 (£4,000 a year) if their child is disabled, helping towards the cost of before and after-school clubs, childminders and nurseries, holiday clubs and other approved childcare schemes.

In June 2022, HMRC paid out £41.6 million in top-up payments, which was shared between approximately 391,000 families across the UK.

Families can find out what childcare support is best for them via Childcare Choices.

Myrtle Lloyd, HMRC’s Director General for Customer Services, said:

Tax-Free Childcare can make a big difference to families, helping with the bills for things like wraparound care for school children, nurseries, childminders and holiday clubs. It’s easy to register – search ‘Tax-Free Childcare’ on GOV.UK.

More than one million families in the UK are entitled to some form of government childcare support and the government is encouraging those eligible to not miss out on their entitlements.

For thousands of families who use Tax-Free Childcare, the money they save each month on their childcare costs is money that goes back into their pockets. Accounts can be opened at any time of the year and can be used straight away, and money can be deposited at any time and used when needed. Any unused money that is deposited can be simply withdrawn at any time.

Further information

Read more information about Tax-Free Childcare and how to register.

Parents and carers 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 may get up to £4,000 a year until they are 17
• 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 tax credits, Universal Credit or childcare vouchers

A full list of the eligibility criteria is available on GOV.UK.

Latest Tax-Free Childcare statistics were released on 17 August 2022. Data is available up to June 2022.

HMRC has produced a refreshed Tax-Free Childcare guide for parents, which explains the reasons and benefits for signing up to the scheme.

Each eligible child requires their own Tax-Free Childcare account. If families have more than one eligible child, they will need to register an account for each child. The 20% government top-up is then applied to deposits made for each child, not household.

Account holders must confirm their details are up to date every three months to continue receiving the government top-up.

Childcare providers can also sign up for a childcare provider account via GOV.UK to receive payments from parents and carers via the scheme.

The government is offering help for households. Check GOV.UK to find out what cost of living support, including help with childcare costs, you could be eligible for.

From: HM Revenue & Customs

Published 17 August 2022