Thousands missing out on Tax-Free Childcare bonus

19 Mar

Thousands of families across the UK are missing out on the chance to save money on the costs of childcare, HMRC has revealed.

Tax-Free Childcare (TFC) permits parents and carers who have children aged up to 11 (17 for children with disabilities) to pay their childcare provider via the scheme and receive a 20% government top-up on any money deposited.

Under TFC the tax relief available is 20% of the costs of childcare up to total childcare costs of £10,000 per child per year. The scheme is therefore worth a maximum of £2,000 per child (£4,000 for a disabled child).

To qualify for TFC all parents in the household must generally meet a minimum income level, based on working 16 hours a week (on average £131 a week), each earn less than £100,000 a year and not already be receiving support through Tax Credits or Universal Credit.

'As children return to their schools, after-school clubs and nurseries, help is available towards the cost of childcare,' said Myrtle Lloyd, Director General for Customer Services at HMRC.

'Families using TFC to pay their childcare provider are already benefiting from the 20% government top-up on deposits, and you could too.'

acca logo

CHARTERED CERTIFIED ACCOUNTANTS

We are registered as auditors and regulated for a range of investment business activities in the United Kingdom by the Association of Chartered Certified Accountants – the global body for professional accountants.

NEWSWIRE

Register to receive our monthly Newswire once a month and we'll send you an email packed full of essential business news and handy tax tips to help save you money.

REGISTER NOW