Families miss out on tax-free childcare


The number of families claiming tax-free childcare has increased by a third from 374,135 to 512,000 in the last year, however, there are thousands of families who are eligible but haven't taken advantage of the scheme. 


In the 2021-22 tax year, the Government paid out £240m in top-up payments to families using the scheme.


The tax-free childcare scheme offers a 20% government funded top-up on money deposited into tax-free accounts. These accounts can be used to pay childcare providers. Accounts can be opened at any time of year and can be used straight away. Money can be deposited at any time and used when needed.


For every £8 paid into a tax-free childcare online account, families will automatically receive an additional £2 in government top-up. This is available for children aged up to 11, or 17 for children with disabilities.


Families receive up to £500 every three months per child, helping towards the cost of before and after-school clubs, childminders and nurseries, holiday clubs and other approved childcare schemes. This amount increases to £1,000 for children with disabilities.


The scheme is open to families earning at least the National Minimum Wage or Living Wage for 16 hours a week, on average, with an earnings cap of £100,000 per year. It is not available for those receiving tax credits, Universal Credit or childcare vouchers.  


For more information, please contact your local Lentells office:

Chard – 01460 64441, chard@lentells.co.uk

Seaton – 01297 20584, seaton@lentells.co.uk

Taunton – 01823 286274, taunton@lentells.co.uk