A million parents could be missing out on a tax break of up to £2,000 – are you one of them?
The Government has pulled out £600million of funding from the Tax-Free Childcare scheme because not enough parents are claiming
THOUSANDS of British parents could be missing out on a tax break worth as much as £2,000 a year, it has emerged.
The Government has pulled £600million out of a scheme meant to help parents pay the sky-high cost of childcare.
It came after hundreds of thousands of eligible Brits failed to claim any cash from the programme.
Ministers were today blasted for failing to ensure children get "the best possible start in life".
was introduced last year and is intended to make childcare cheaper for nearly all working parents.
Most people who work at least 16 hours a week, have children aged 11 or younger and earn less than £100,000 are entitled to claim.
The Government refunds claimants £2 for every £8 they spend on childcare - effectively meaning the care they buy is exempt from tax.
The Treasury estimates that a total of 1.5million are eligible to take part in the scheme.
But just 235,000 Brits have opened accounts on the website used to administer the benefit - meaning more than 1million could be owed extra money.
The budget for the programme was previously estimated at £3.1billion over the next four years.
But that has been cut to £2.5billion because it has attracted a lower take-up than expected.
How to check if you're owed hundreds of pounds
TAX-FREE Childcare (TFC) is available to an estimated 1.5million British parents.
To qualify, you - and your partner, if you have one - must work for at least 16 hours a week and have a child aged 11 or younger.
You cannot claim TFC if someone in your household earns more than £100,000, or if you claim Universal Credit, Working Tax Credit or Child Tax Credit.
The scheme gives all claimants £2, paid into an online account, for every £8 they spend on childcare.
There is an annual limit of £2,000 per child.
It means that basic-rate taxpayers are effectively exempted from income tax on the money they end up spending on childcare.
TFC replaces the previous system of childcare vouchers.
To apply for the tax break, - which also features a calculator so you can work out whether you're better off claiming Universal Credit rather than TFC.
You also need to check if your childcare provider is signed up to the scheme.
Shadow Education Secretary Angela Rayner blasted: “Austerity is clearly not over for hard-pressed families.
“The Budget has completely failed to provide children with the best possible start in life, and parents will once again be left without support in accessing the childcare they need.
“The fact that projected spending has fallen by hundreds of millions of pounds yet again means thousands of parents will not be getting the support they need with the cost of childcare."
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Tory vice-chairman Tom Pursglove hit back: “With our balanced approach to the economy, we are able to increase spending on childcare in real terms since 2010 to around £6billion a year by 2020.
“This includes delivering our commitment to provide working parents of three- and four-year-olds 30 hours free childcare a week – helping them balance work and family life and give children the best start in life."
HMRC is now launching a marketing campaign to ensure parents know about the tax break.
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