Parents across the United Kingdom are being encouraged to investigate their eligibility for financial assistance that could amount to up to £2,000 annually through the Tax-Free Childcare scheme. The HM Revenue and Customs (HMRC) has issued a call to action, highlighting that many families might be missing out on significant savings that could ease the burden of childcare costs.
In a recent announcement shared on social media platform X, HMRC posed the question: “Could you be missing out on childcare savings?” The agency emphasizes that families with a combined income of less than £100,000 per year are eligible to apply for this support, which can provide up to £500 every three months for each child.
Details of the Tax-Free Childcare Scheme
For qualifying families, the potential benefits are substantial. The Government’s website states that parents can receive up to £1,000 every three months, or £4,000 annually, if their child has disabilities. To access these funds, families must establish an online childcare account. For every £8 contributed to this account, the Government adds £2 to assist in covering childcare expenses.
Eligible childcare costs can include childminders, nurseries, after school clubs, and play schemes. If a child has disabilities, the additional funds can also be utilized for extra hours of childcare or even for purchasing necessary equipment, such as mobility aids.
Who Can Qualify?
To qualify for Tax-Free Childcare, both parents (if applicable) must generally meet specific employment criteria. This includes being employed, on sick leave, or taking shared parental, maternity, paternity, or adoption leave. Even if a parent is not currently working, they may still qualify if their partner is employed and they receive benefits such as Incapacity Benefit or Carer’s Allowance.
The eligibility thresholds for income are clearly defined. Over the next three months, both partners need to expect earnings of at least:
– £2,539.68 before tax if aged 21 or older (approximately £195.36 weekly)
– £2,080 before tax if aged between 18 and 20 (approximately £160 weekly)
– £1,570.40 before tax if under 18 or an apprentice (approximately £120.80 weekly)
Self-employed individuals who commenced their businesses less than a year ago may qualify with lower earnings, and earnings from multiple jobs can be combined to meet the threshold.
It is crucial to note that families with an expected “adjusted net income” exceeding £100,000 during the current tax year will not be eligible for this support. Additionally, the child must be 11 years old or younger and usually reside with the family, with eligibility ceasing on the 1st of September following their 11th birthday. Adopted children qualify, but foster children do not.
For more detailed information and to check eligibility, parents can visit the official Government website.
