TAX MATTERS: 405,420 families saved on childcare costs with Tax-Free Childcare

More than 405,000 families saved on childcare costs in December thanks to Tax-Free Childcare and HM Revenue and Customs (HMRC) is urging those yet to sign up not to miss out.

The latest figures revealed by HMRC show £41.5 million in government top-up payments were made to working families across the UK in December 2022 and an increase of more than 77,500 families using the scheme compared to December 2021. Each family saved up to £2,000 a year per child or £4,000 if their child is disabled.

Tax-Free Childcare is a financial support for working families with children up to the age of 11, or 16 if their child has a disability. The Government top up can be used to pay for any approved childcare including holiday clubs, breakfast and after school clubs, child minders and nurseries.

Families who have not yet signed up should check their eligibility and apply online.

Opening a Tax-Free Childcare account is quick and easy and can be done at any time of the year.

Myrtle Lloyd, HMRC’s Director General for Customer Services, said: “We want to help families get the most out of their finances and Tax-Free Childcare can help pay towards their childcare costs. Search ‘Tax-Free Childcare’ on GOV.UK to get started.”

For every £8 paid into the Tax-Free Childcare account, families automatically receive an additional £2. Families can save up to £500 every three months (£2,000 a year) for each child or £1,000 (£4,000 a year) if their child is disabled.