£500 Every 3 Months Tax Free Childcare29th June 2021
You could get up to £500 every 3 months for each of your children to help with the cost of childcare – tax free. This works out to be up to £2000 a year.
HM Revenue and Customs (HMRC) is now reminding working families that they can use Tax-Free Childcare to help pay for their childcare costs over the summer holidays.
What Is It?
The tax-free payments are available for children aged up to 11, or 17 if the child has a disability. For every £8 that you deposit into the account, the government will give families an additional £2. The cap is £500 every 3 months or £1000 if the child is disabled. The childcare top-up for working parents can be used to help pay for accredited holiday clubs, childminders, or sports activities.
You can even get Tax-Free Childcare at the same time as 30 hours free childcare if you’re eligible for both.
The government are supporting this scheme in an effort to promote happy, healthy, and active lifestyles amongst children over the summer holidays.
Myrtle Lloyd, HMRC’s Director General for Customer Services, said:
‘We want to help kids stay active this summer, whether they are going to summer holiday clubs or a childminder. A childcare top-up will go a long way towards helping parents plan and pay for summer activities to keep their kids happy and healthy.’
More than 282,000 working families used their account in March 2021, the highest recorded number of families in any one month since the scheme was launched in April 2017. These families received a share of more than £33 million in government top-up payments.
Tax-Free Childcare is also available for pre-school aged children attending nurseries, childminders or other childcare providers. Families with younger children will often have higher childcare costs than families with older children, so the tax-free savings can really make a difference.
Working parents can check their eligibility for the top ups HERE. Families can apply for a Tax-Free Childcare account at any time, and can start using it straight away.
Your eligibility depends on:
~ if you are working
~ your income (and your partner’s income, if you have one)
~ the child’s age and circumstances
~ your immigration status
If you are working:
You can usually get Tax-Free Childcare if you (and your partner, if you have one) are:
~ in work
~ on sick leave or annual leave
~ on shared parental, maternity, paternity or adoption leave
Your income is taken into account when calculating if you are eligible.
~ You will need to earn a certain amount over the next 3 months. This is at least the National Minimum Wage or Living Wage for 16 hours a week on average.
~ If you or your partner have an expected ‘adjusted net income’ over £100,000 in the current tax year you will not be eligible. This includes any bonuses you expect to get.
For all the fine details visit the government website.