Save on Easter Childcare Costs
Savings of up to £2,000 per child annually, or £4,000 for children with disabilities.
HM Revenue and Customs (HMRC) recently issued a reminder to working families about the potential savings on childcare costs available through Tax-Free Childcare ahead of the school holidays.
As the Easter break approaches, families who haven’t yet registered for Tax-Free Childcare could miss out on savings of up to £2,000 per child annually, or £4,000 for children with disabilities.
Approved Childcare
Tax-Free Childcare supports the cost of approved childcare for children aged 11 or under, or up to 16 for children with disabilities.
Parents can receive up to £500 every three months (£1,000 for children with disabilities) for every £8 contributed to their online account, with an additional £2 top-up automatically added by the government.
How long does it take to apply?
Applying online for a Tax-Free Childcare account takes just 20 minutes and can cover expenses for nursery, childminder, breakfast or after-school clubs, holiday activity clubs, specialist equipment for disabled children in childcare, and can be used in conjunction with 15 or 30 hours of free childcare.
Parents can deposit funds into their account as soon as it’s opened, ensuring it’s ready for use when needed, and can withdraw any unused funds at any time.
Who is eligible for Tax-Free Childcare?
Eligibility for Tax-Free Childcare includes families who:
- Have children aged 11 or under (eligibility ends on 1 September after the child’s 11th birthday, or 16th birthday if the child has a disability).
- Earn at least the National Minimum Wage or Living Wage for 16 hours a week on average.
- Have an individual annual income of no more than £100,000.
- Do not receive tax credits, Universal Credit, or childcare vouchers.
More information on eligibility is available on GOV.UK.
From April 2024, eligible working parents of 2-year-olds can access 15 hours of free childcare per week, expanding to 30 free hours for working parents of children from nine months to the start of school by September 2025. This could save families up to £6,900 per year using the full 30 hours.
Families can explore the childcare options available to them by visiting Childcare Choices.
Summary
| Feature | Details |
|---|---|
| Annual Savings | Up to £2,000 per child, £4,000 for a disabled child |
| Age Eligibility | Children aged 11 or under, up to 16 for children with disabilities |
| Government Top-Up | £2 for every £8 deposited, up to £500 every 3 months (£1,000 for disabled children) |
| Application Time | 20 minutes online |
| Use For | Nursery, childminder, clubs, specialist equipment for disabled children |
| Eligibility Criteria | Children aged 11 or under, earning at least the NMW/Living Wage for 16 hours, annual income under £100,000, not receiving specific benefits |
| Free Childcare Offer from 2024 | 15 hours for 2-year-olds, expanding to 30 hours for children aged 9 months to school start by 2025 |
| Potential Annual Savings (30 hours) | Up to £6,900 |
Families are encouraged to explore their childcare options to find the best fit for their needs, potentially leading to significant savings and support.
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