Millions of families missing out on up to £2,000 tax-free childcare – how to claim
MORE than a million families could be missing out on help worth £2,000 a year per child to pay for childcare costs.
That's according to the latest government figures revealed this week, which show that just 172,000 families had signed up to its tax-free childcare scheme as of September.
While this is up on the 71,000 families using the scheme in September 2018, it's still means more than 1.1million families are missing out based on the 1.3million the government says are eligible in 2019/20.
Tax-free childcare launched in April 2017 before completely replacing the government's previous childcare vouchers scheme, which closed to new applicants on October 5, 2018.
Under the tax-free childcare scheme, you can get up to £500 every three months - £2,000 a year - for each of your children to help with the cost of childcare.
It's available to working parents each earning at least £131 a week - which is effectively the national minimum wage or living wage for 16 hours a week - and less than £100,000 a year each.
What help is available for parents?
CHILDCARE can be a costly business. Here is how you can get help:
- Free childcare - All three- to four-year-olds in England can get 570 hours of free childcare a year. While parents of three- and four-year-olds can apply for 30 hours of free childcare a week if they work at least 16 hours a week at the national living or minimum wage and earn less than £100,000 a year.
- Universal Credit - For children under 16, some working families can get up to £277.08 a month (£3,324.96 a year) for their first child and £231.67 a month (£2,780.04) for any second or subsequent children. Universal Credit will also cover up to 85 per cent of childcare costs up to £646 a month for one child (£7,752 a year) or £1,108 a month (£13,296 a year) for two children.
- Tax-free childcare - Available to working families and the self-employed, for every £8 you put in the government will add an extra £2 up to a maximum of £2,000 a year per child.
See our Childcare Help guide for more information.
To claim, kids need to be aged 11 or under or 16 and under if they're disabled.
are certified as blind or severely sight-impaired.
If you're eligible, you get £2 for every £8 you pay towards childcare.
To get the maximum £2,000 per child you need to spend at least £10,000 a year on childcare costs.
Those with disabled children can claim a higher £4,000 a year if the kids get disability living allowance, personal independence payment or armed forces independence payment.
Cash is added by the government upfront directly into parents' childcare accounts, which they then have to use to spend on a registered childcare provider.
You can - it takes about 20 minutes and you'll need your national insurance number and unique taxpayer reference if you're self-employed.
Becky O’Connor, personal finance specialist at Royal London, said: “Use of the tax-free childcare scheme is not surprisingly highest among parents of one and two-year olds, who have the highest childcare costs.
"It’s also high in London and the South East, where childcare tends to be more expensive.
"But use of the scheme remains dismally low among parents of school age children. If they already receive childcare vouchers from their employer and don’t want to give them up, that makes sense, as vouchers are often better value.
"Yet if they are simply missing out on free money from the government for help with childcare costs and not using any other support scheme, then they should consider registering for it as soon as possible."
The Sun has contacted HMRC.
More on childcare
Martin Lewis has previously urged parents to claim their £2,000 a year tax-free cash entitlement.
And the good news is that if you're eligible for tax-free childcare you may also be able to claim for 30 hours free childcare for three- and four-year-olds.
But those who already get childcare vouchers may wants to consider sticking with these instead as research recently revealed that 80 per cent of parents are worse off under tax-free childcare.