HMRC urges UK households to 'check out' and claim free £2,000 perk
Tax-free childcare is a scheme where you receive a cash top-up from the Government, and if you’re eligible, you can get up to £500 every three months for each of your children.
HMRC has issued an alert as it urges thousands of parents to claim £2,000 help. Tax-free childcare is a scheme where you receive a cash top-up from the Government, and if you’re eligible, you can get up to £500 every three months for each of your children.
This adds up to £2,000 over 12 months. HMRC said: “Are you missing out on egg-cellent childcare savings? Chick out our Tax-Free Childcare scheme and sign up to unlock savings of up to £2,000 a year per child on approved childcare costs.”
If you're looking to claim tax-free childcare, your child generally needs to be 11 or younger, and they’ll usually have to live with you. They can stay eligible for the scheme until September 1st after their 11th birthday. If your child has a disability, they might qualify for tax-free childcare until September 1st after they turn 16.
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To get the higher rate of tax-free childcare, your child will need to receive Disability Living Allowance, Personal Independence Payment, Armed Forces Independence Payment, or be certified as blind or severely sight-impaired.
As for eligibility, you’ll need to earn at least the minimum wage for 16 hours a week (which is the equivalent of full-time work) but earn less than £100,000 a year. This applies to both you and your partner if you’re in a couple.
If you're self-employed, the earnings requirement still applies, but if you’ve been self-employed for less than 12 months, you won’t need to meet the minimum income requirement.
There are also some situations where you can still claim tax-free childcare even if you're not working.
For instance, if you're on sick leave, annual leave, shared parental leave, maternity or paternity leave, adoption leave, or if one of you is working while the other is claiming benefits like Incapacity Benefit, Carer’s Allowance, or Employment and Support Allowance.
Setting up a tax-free childcare account is simple and free through the GOV.UK website.