Parents could be missing out on Tax-free childcare bonus

Childcare

 

 

Parents using tax-free childcare accounts to pay for their childcare costs, could receive a government top-up worth up to £500 every three months. 

 

 

 

There are currently almost 248,000 families across the UK using tax-free childcare. Tax-free childcare allows parents or carers who have children ages up to 11, or 17 if their child has a disability, to pay their childcare provider through the scheme and receive a 20% government top-up on any money deposited.

 

For every £8 per child a parent or carer deposits, they will receive £2 in top-up, up to the value of £500 every three months, or £1,000 if their child is disabled. That equals £2,000, or £4,000 for the care of a disabled child, for a whole year. The top-up is paid directly into the child’s account and is ready to use almost instantly.

 

Families can use the money to pay their childcare provider, where the childcare provider has signed up to tax-free childcare. Families could also save money to earn the government top-up and use the money to pay for childcare during the school holidays.

 

Tax-free childcare is also available to families with pre-school aged children attending nurseries, childminders or other childcare providers.

 

If parents and carers’ working patterns have changed due to Covid-19 or they have received either furlough payments or SEISS, they may still be eligible to receive tax-free childcare.

 

Each eligible child requires their own tax-free childcare account. If families have more than one eligible child, they will need to register an account for each child. The 20% government top-up is then applied to deposits made for each child.

 

Account holders must confirm their details are up to date every three months to continue to receive the government top-up.