Tax free child care?

The tax man (HMRC) is pushing the fact that families in the South West could be missing out on child care contributions. If you:

  • 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

You could save up to £2,000 a year on child care costs. As the cost of living crisis bites this autumn, now might be a good moment to check if you could benefit. HMRC claim that more than 37,000 families in the South West saved money on their childcare costs in June 2022.

Families can sign up to Tax-Free Childcare to help pay for holiday clubs, before and after-school clubs. It can contribute towards the costs of childminders and nurseries, and other approved childcare schemes. It is available to families with children up to the age of 11, or 17 if their child has a disability.

The government will pay 20% of childcare costs by topping up the money paid into a Tax-Free Childcare account. If you pay £8 into the online account, you’ll automatically receive an additional £2 in government top-up.

You can find out more about the scheme here:

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