HMRC have recently announced that during the 2022 to 2023 tax year tax free childcare aided 649,935 families in reducing their childcare expenses.
The latest data published by HM Revenue and Customs (HMRC) on 24 May 2023 confirms that this is an increase of over 137,500 from the previous tax year.
As the number of families receiving government assistance continues to grow annually HMRC is encouraging eligible working families to take advantage of the financial support provided for approved childcare services such as nurseries, breakfast and after school clubs and child minders.
HMRC’s Director General for Customer Services, Myrtle Lloyd, commented:
“Tax-Free Childcare offers a flexible solution for families, enabling them to save for childcare costs throughout the year and utilize the funds when necessary. It can greatly impact the household budget of working families. Search ‘Tax Free Childcare’ on GOV.UK and sign up now.”
What is tax free childcare?
Last year £533 million in government funds were distributed among families in the UK helping them save on childcare costs.
Families with children up to 11 years old or up to 16 years old if the child has a disability can save up to £2,000 per child annually or £4,000 if the child is disabled.
For every £8 deposited into a tax free childcare account the government automatically contributes an additional £2.
Families can save up to £500 every three months per child or £1,000 if their child is disabled.
Earlier in 2023 the government announced plans to extend the 30 hours of free childcare per week offer for working parents with children aged 9 months and older until they begin school.
Financial Secretary to the Treasury, Victoria Atkins, stated:
“Although thousands of working families are already benefiting from Tax-Free Childcare, many more are missing out on the support they are entitled to. Parents should verify their eligibility and apply online, as the top-up could significantly help working families when they need it most.”
How do I claim tax free childcare?
Over one million families may be eligible for tax free childcare. Those who have not yet registered should verify their eligibility and sign up to start saving.
Opening a tax free childcare account is simple and can be completed online in approximately 20 minutes.
Funds can be deposited at any time and used immediately or whenever needed. Unused money in the account can be withdrawn at any time.
To find out more and start the process of claiming you should visit GOV.UK to register and claim your tax free childcare.
This initiative is one of many measures the government is implementing to alleviate the cost of living while aiming to halve inflation this year which is currently straining household budgets.
The government is providing assistance to household in other ways in addition to tax free childcare through cost of living support which you can find out more about on GOV.UK.
