HMRC is using Playday, the national day for play, to remind working parents about Tax-Free Childcare scheme, which can help eligible families meet the cost of nurseries, childminders, holiday clubs, breakfast clubs and after-school clubs.

Employers can also support working parents by promoting the scheme. It can help improve employee wellbeing, especially during school holidays. Childcare costs can place a significant financial burden on families at these times.

Families can save up to £2,000 per child

The government adds £2 for every £8 paid into a Tax-Free Childcare account. Families can receive up to £2,000 a year for each child. The maximum rises to £4,000 a year for a disabled child.

Families can receive up to £500 in top-up payments every three months. This rises to £1,000 for a disabled child.

Parents can open an account for each eligible child. They can then use the funds to pay approved childcare providers.

HMRC says nearly 75,000 childcare providers now accept payments through the scheme.

Approved childcare includes nurseries, childminders, holiday clubs, breakfast clubs and after-school clubs.

Tax-Free Childcare can also help families with older children. HMRC reports that use of the scheme among children aged eight and over has risen by more than 20% compared with the previous year.

Eligibility

Families may qualify if they:

• Have a child aged 11 or under, or a disabled child aged up to 16.
• Each earn at least the National Minimum Wage or Living Wage for 16 hours a week, on average. This includes the parent’s partner, if they have one.
• Each earn no more than £100,000 a year.
• Do not receive Universal Credit or childcare vouchers.

Once parents open an account, they can use the funds straight away or they can also save them for future childcare costs and parents can withdraw unused money at any time.

Families can use Tax-Free Childcare alongside government-funded childcare hours, if they qualify.

To find out more and apply, see: https://www.gov.uk/tax-free-childcare