You may have noticed that HMRC is running a media campaign to remind people of their eligibility to get £2,000 per child towards childcare costs every year.
If you qualify as a working parent, you’ll receive £2 for every £8 paid into a tax-free childcare account, up to a maximum of £2,000 per child (under 12) or £4,000 for disabled children (under 17) – up to a maximum of £10,000.
You basically open an online account, open to others to pay into also (maybe grandparents?) with a flexible level that you can pay in. If you withdraw from the account you won’t receive the government contribution so it’s pointless doing this if you intend on taking money out but the option is there should you need to access the funds.
To qualify, account holders need to be in work for 16+ hours a week, earning at least the national minimum wage. Self-employed people who do not expect to make enough profit in the next 3 months can use an average of how much they expect to make over the current tax year. Additionally, the minimum earning threshold does not apply to self-employed individuals who started their business less than 12 months ago.
Any working family can access this government initiative, regardless of their employer’s position or willingness to adopt the scheme. Check out the Childcare Choice website to see which childcare funding option suits you best.
The Childcare Choices website includes a childcare calculator for parents to compare all the government’s childcare offers and check what works best for their families, including the 30-hour free childcare offer, tax-free childcare or universal credit.
Useful link: Childcare Choices