HM Revenue and Customs (HMRC) is reminding working parents in the UK to not miss out on the opportunity to get up to £2,000 a year to pay for regulated childcare, including holiday clubs and other out-of-school activities, during the Easter holidays.
Tax-Free Childcare provides thousands of eligible working families with up to £500 every three months (or £1,000 if their child is disabled) towards the cost of holiday clubs, before and after-school clubs, childminders and nurseries, and other approved childcare schemes.
For every £8 deposited into a Tax-Free Childcare online account, families will 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.
About 328,000 working families used Tax-Free Childcare across the UK in December 2021, receiving a share of £34 million in government top-up payments towards their childcare costs.
This scheme can help working families including the self-employed and is one of many ways the government is supporting households to reduce their costs and keep more of what they earn to help pay for other bills.
Helen Whately, HM Treasury’s Exchequer Secretary to the Treasury, said:
There are lots of brilliant holiday clubs and childcare providers to help working parents during the Easter holidays, and Tax-Free Childcare is a great offer that can help cut the childcare bills.
I urge families across the UK to take advantage of this support and put extra pounds in their pocket – sign up now and save on your childcare costs.
By depositing money into their accounts, families can benefit from the 20% top-up and use the money to pay for childcare costs when they need it. Accounts can be opened at any time of the year and can be used straight away.
For example, if parents and carers have school-aged children and use holiday clubs during school holidays, they could deposit money into their accounts throughout the year. This means they could spread the cost of childcare while also benefitting from the 20% government top-up. Any unused money that is deposited can be simply withdrawn at any time.
Tax-Free Childcare is also available for pre-school aged children attending nurseries, childminders, or other childcare providers. Families with younger children will often have higher childcare costs than families with older children, so the tax-free savings can really make a difference.
Childcare providers can also sign up for a childcare provider account via GOV.UK to receive payments from parents and carers via the scheme.
For more information about Tax-Free Childcare.
For more information about government childcare offers.
Parents and carers could be eligible for Tax-Free Childcare if they:
- have a child or children aged up to 11. 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 under £100,000 per annum
- do not receive tax credits, Universal Credit or childcare vouchers
Latest Tax-Free Childcare statistics were released on 16 February 2022. Data is available up to December 2021.
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 3 months to continue receiving the government top-up.