Are you or your employees making good use of Tax-Free Childcare?

HMRC, Limited Company, News, Sole Trader,

Tax-Free Childcare is available to working families to help them save on their childcare costs. However, many are not taking advantage of this support; HMRC are therefore encouraging families who haven’t yet signed up to consider doing so.

Tax-Free Childcare can be worth up to £2,000 annually per child, or £4,000 if the child is disabled. It can be used to help pay for approved childcare for children aged 11 and under, or 16 and under if they have a disability.

Parents first apply for a childcare account. Once the account is opened, the parents can deposit money that will be used to pay for childcare. Where eligible, for every £8 paid into the account, the government will pay in £2 to use to pay the childcare provider.

To be eligible for Tax-Free Childcare:

A family must:

  • Have a child aged 11 or under, or 16 and under if they have a disability.
  • Be earning at least the National Minimum Wage for 16 hours a week, on average.
  • Each earn no more than £100,000 a year.
  • Not be receiving tax credits, Universal Credit or childcare.

Employed, self-employed, and directors can all apply, but parents will need to confirm eligibility.

From April 2024, eligible working parents can access 15 hours free childcare for 38 weeks a year that can be used flexibly with one or more providers.

This scheme will be expanded further until 30 free hours of childcare are available for working parents with children between nine months old and school age.

Apply for Tax-Free Childcare here.  

Register for childcare support here.

If your team have children, it could be really helpful to pass them these details to see if they’ve checked their eligibility for tax-free childcare.

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