HM Revenue and Customs (HMRC) has confirmed that more than 24,900 families in Scotland benefited from UK Government funding towards childcare costs in September 2022. Overall, HMRC paid out £44.4 million in Tax-Free Childcare top-up payments to more than 401,300 families across the UK in September.
By comparison, the latest statistics show the number of families in Scotland who are using Tax-Free Childcare has increased by 6,415 since September 2021. However, HMRC warns that thousands of families are still missing out on the top-up which could save them up to £2,000 each year per child towards the cost of their childcare.
Tax-Free Childcare provides working families, earning up to £100,000 a year, with financial help towards childcare. For every £8 paid into a Tax-Free Childcare online account, families will automatically receive an additional £2 from the UK Government - this means they can receive up to £500 every three months (£2,000 a year), or £1,000 (£4,000 a year) if their child is disabled.
The top up payments can be used to pay for any approved childcare for children aged 11 or under - or up to 17 if the child has a disability - whether your child goes to nursery, a child minder, has term-time wraparound care or goes to a holiday club.
Families can check their eligibility and see the options for childcare support at Childcare Choices here.
Myrtle Lloyd, HMRC’s Director General for Customer Services, said: “We know childcare can be expensive so using Tax-Free Childcare can make a huge difference to household finances. To find out more, search ‘ Tax-Free Childcare’ on GOV.UK.”
Tax-Free Childcare eligibility
Parents and carers could be eligible for Tax-Free Childcare if they:
- Have a child or children aged up to 11. They stop being eligible on September 1 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 year
- Do not receive Tax Credits, Universal Credit or childcare vouchers
A full list of the eligibility criteria is available on GOV.UK here.
Tax-Free Childcare account
Opening an online Tax-Free Childcare account is straightforward and can take around 20 minutes to sign up.
Accounts can be opened at any time, money can be deposited and used straight away or when it’s needed. Unused money in the account can be withdrawn at any time - go to GOV.UK here to register to get started.
There is a full step-by-step guide to claiming Tax-Free Childcare on GOV.UK here.
To keep up to date with the latest cost of living news, join our Money Saving Scotland Facebook page here, or subscribe to our newsletter which goes out four times each week - sign up here.
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