More than 401,300 families benefitted from £44.4 million in government funding towards childcare costs in September 2022, HM Revenue and Customs (HMRC) has revealed.
Compared to September 2021, the latest Tax-Free Childcare statistics show the number of families who are using Tax-Free Childcare has increased by 85,475. But thousands of families are still missing out on the top-up which could save them up to £2,000 a year per child towards the cost of their childcare.
Tax-Free Childcare provides working families, earning up to £100,000 a year, with financial help towards childcare. For every £8 paid into a Tax-Free Childcare online account, families will automatically receive an additional £2 from the government. This means they can receive up to £500 every three months (£2,000 a year), or £1,000 (£4,000 a year) if their child is disabled.
The top up payments can be used to pay for any approved childcare for children aged 11 or under, or up to 17 if the child has a disability whether your child goes to nursery, a child minder, has term-time wraparound care or goes to a holiday club.
Families can check their eligibility and see the options for childcare support at Childcare Choices.
Myrtle Lloyd, HMRC’s Director General for Customer Services, said:
We know childcare can be expensive so using Tax-Free Childcare can make a huge difference to household finances. To find out more, search ‘Tax-Free Childcare’ on GOV.UK.
Families could be eligible for Tax-Free Childcare if they:
- have a child or children aged 11 or under. They stop being eligible on 1 September after their 11th birthday. If their child has a disability, they may get up to £4,000 a year until they are 17
- earn, or expect to earn, at least the National Minimum Wage or Living Wage for 16 hours a week, on average
- each earn no more than £100,000 per annum
- do not receive tax credits, Universal Credit or childcare vouchers
A full list of the eligibility criteria is available on GOV.UK.
Opening an online Tax-Free Childcare account is straightforward and can take around 20 minutes to sign up. Accounts can be opened at any time, money can be deposited and used straight away or when it’s needed. Unused money in the account can be withdrawn at any time. Go to GOV.UK to register to get started.
The government has launched an awareness raising advertising campaign to ensure families get the childcare support they are entitled to. Visit Childcare Choices to learn about the options and find out the best childcare offer for families.
The government is offering help for households. Check GOV.UK to find out what cost of living support, including help with childcare costs, families could be eligible for.
Further information
More information about Tax-Free Childcare and how to register.
Latest Tax-Free Childcare statistics were released on 16 November 2022. Data is available up to September 2022.
HMRC has produced a refreshed Tax-Free Childcare guide for parents, which explains the reasons and benefits for signing up to the scheme.
Each eligible child requires their own Tax-Free Childcare account. If families have more than one eligible child, they will need to register an account for each child. The 20% government top-up is then applied to deposits made for each child, not household.
Account holders must confirm their details are up to date every three months to continue receiving the government top-up.
Childcare providers can also sign up for a childcare provider account via GOV.UK to receive payments from parents and carers via the scheme.
