HMRC has urged working families across the UK not to miss out on a £500 tax-free boost to help cover costs during the summer holidays.
Working parents with young or school-age children could miss out on up to £1,000 every three months to help with childcare costs. With just a few weeks left in the school term and the cost of living crisis worsening due to rising energy and fuel prices, the increase could help pay for vacation clubs and extracurricular activities during the summer months, reports The Daily Record.
Tax Free Childcare offers eligible working families up to £500 every three months, or £1,000 if their child is disabled, to cover the cost of holiday clubs, before and after school clubs , childminders and nurseries and other approved child care programs.
Read more: People on PIP and DLA benefits could miss £500 cost of living payment
Families who deposit £8 into a Tax-Free Childcare online account receive an additional £2 top-up from the UK government. It is available for children up to 11 years old, or 17 years old if that child has a disability.
An estimated 1.3 million families could be eligible for this assistance, with parents and guardians urged to check their eligibility and register here. 512,415 families used Tax-Free Childcare in the UK in the 2021/22 tax year, up from 374,135 in 2020/21.
Helen Whately, Secretary of Her Majesty’s Exchequer to the Treasury, said: “It is fantastic that more parents are opting for duty-free childcare. This support helps cover childcare costs for working families.
“With over a million families eligible, I want to encourage parents to take advantage of duty-free childcare and keep the extra pounds in their pocket.”
Myrtle Lloyd, Director General of Customer Services at HMRC, added: “Duty-free childcare can make a big difference for families, helping to pay the bills for things like nurseries, nannies and after-school clubs.”
How does the diet work?
The scheme offers a UK government-funded 20% top-up on money deposited into tax-free childcare accounts, which parents and guardians can use to pay their childcare provider. Accounts can be opened at any time and used immediately, with the ability to deposit money at any time and use it when needed.
For example, if parents and guardians have school-age children and use vacation clubs outside of school hours, they could deposit money into their accounts throughout the year, which means that ‘they could split the cost of childcare while still benefiting from the 20% increase. at the top. Any unused money that is deposited can be withdrawn at any time.
Preschoolers
Tax-Free Childcare is also available for preschoolers attending nurseries, childminders, or other childcare providers. Families with younger children often see higher childcare costs than those with older children and tax-free savings may be able to make a difference.
Childcare providers can also open a Childcare Provider Account through GOV.UK to receive payments from parents and guardians through the scheme.
Did you save money by using Tax-Free Childcare? Let us know!
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