WORKING parents across the UK can claim up to £2,000 per child a year to pay for childcare costs – including over the summer holidays – but 1.4million might be missing out.
With the break already starting for some, and beginning in two weeks for most, this is often when childcare is the hardest to find – and the most expensive.
1 Parents can choose from more than 68,000 childcare providers that have signed up, including summer camps.Credit: Alamy
But parents need not struggle with the annual six-week time-off as they can claim up to £2,000 a year per child under the government’s “tax-free childcare scheme”‘ to help with costs.
And this cash can be used on school holiday clubs and summer camps – provided they’re approved by the government.
It says more than 68,000 childcare providers have signed up to the scheme – you can find out if your nearest is covered using the government website.
But The Sun reported in March that almost 1.4million families are missing out on the scheme, with only 125,000 families using it since it came into force in April 2017.
How to apply for tax-free childcareYOU can use the Government’s childcare calculator to work out what help you might be entitled to.You can find this tool on Gov.uk.
If it looks like you will be eligible, you can apply online.
You’ll need your details (and your partner’s, if you have one), including your national insurance number and unique taxpayer reference (UTR), if you’re self-employed
It takes 20 minutes to apply and you’ll find out if you qualify within seven days.
Be aware that you have to apply for both tax-free childcare and 30 hours of free childcare at the same time.
If you’re eligible you’ll get a childcare account. You can use this to pay your childcare provider.
To continue getting the benefit, you must confirm your details are up to date every three months.
Sarah Coles, personal finance analyst at financial provider Hargreaves Lansdown describes the current system as a “baffling maze”.
“There are two kinds of tax free childcare, plus tax credits, and various versions of free nursery hours.
“It takes time and effort to work out which schemes you qualify for, and which suit you best – and working parents don’t have a huge amount of time or effort to spare.”
From tax-free childcare to free nursery hours – check out our guide to the childcare help worth £5,000-plus you may be missing out on.
But if tax-free childcare is the right scheme for you, then here’s how it works.
How tax-free childcare works
For every £8 that families pay for childcare, the government will make a top-up payment of an additional £2.
The maximum government top-up is £500 per quarter – or £2,000 – for each child, which means you’d be spending up to £10,000 on childcare.
This government top-up is added instantly to online childcare accounts and parents can then send payments directly to their childcare providers.
And the maximum government top-up is even more at £1,000 per quarter or £4,000 a year if your child is disabled.
What childcare help is available for parents?CHILDCARE can be a costly business. Here is how you can get help:
30 hours free childcare – Parents of three- and four-year-olds can apply for 30 hours of free childcare a week.To qualify you must work at least 16 hours a week at the national living or minimum wage and earn less than £100,000 a year.
Tax credits – For children under 16, some working families can get up to £122.50 a week depending on their income to help with childcare costs.
Childcare vouchers – If your employer offers childcare vouchers you can get up to £933 a year in tax and national insurance savings.You pay for your childcare before your tax contributions are taken out. This scheme is now shut to new joiners.
Tax-free childcare – Available to working families and the self-employed, for every £8 you put in the Government will add an extra £2.
The money saved can be put towards a whole range of childcare options, including before and after school care when term time starts again in September.
All registered childcare providers, from nannies, nurseries, to after-school clubs, childminders and summer camps, can sign up to receive the payments from parents through tax-free childcare.
The scheme is open to working parents, including the self-employed, who together earn between the minimum wage and £100,000 a year and have children aged 0- to 11-years-old.
You can find out more and apply through the Childcare Choices website.
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