With the school holidays in full swing, employers are being urged to advise employees that they’re entitled to tax-free childcare.
The government scheme is available to working parents (including those who are self-employed) with children aged up to 11 (or 16 if disabled). For every £8 you pay in, the government will add an extra £2, up to a total of £2,000 per child every year. If your child is disabled, they will pay up to £4,000 per year.
In order to be eligible for tax-free childcare, you need to earn more than £131 a week and less than £100,000 a year.
The scheme can be used to pay more than 58,000 childcare providers in the UK, including childminders, nurseries and sports camps running during the summer. Despite being able to help ease the financial pressure on families, statistics released by HMRC earlier this year showed that parents have been slow to embrace tax-free childcare.
Despite an estimated 1.5 million families in the UK being eligible for the scheme, only around 125,000 had taken advantage of it by March 2019.
Nahid Khan, editor of HMRC’s employer bulletin commented:
“Some parents are still missing out on the benefits of tax-free childcare and how it can reduce their childcare costs. We would welcome some help from employers in changing that.”
By encouraging your employees to take advantage of tax-free childcare, you could be helping them to alleviate what’s often a very stressful situation. What’s more, with more childcare options available to them, it could mean that fewer members of staff need time off between July and September.
To apply for the scheme yourself or to direct employees to it, visit www.childcarechoices.gov.uk where you’ll be able to find all the information you need and set up an online account.
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