HMRC Urges Parents to Use Tax-Free Childcare Scheme

HM Revenue and Customs is urging working parents to utilize the government-backed Tax-Free Childcare savings scheme to reduce expenses during the October half-term break. The program provides a £2 top-up for every £8 deposited by parents, enabling eligible families to save up to £2,000 annually per child under 11, or up to £4,000 for disabled children until age 16.

To qualify, both parents must earn at least the National Minimum or Living Wage for an average of 16 hours per week and earn less than £100,000 annually. Families receiving Universal Credit or childcare vouchers are ineligible. The support covers nursery fees, before- and after-school clubs, and approved holiday activity clubs.

June data shows that 601,620 families received a total of £55.7 million in top-ups, with an average of £93 per family. Myrtle Lloyd, the Chief Customer Officer of HMRC, encouraged parents to use the scheme to avoid financial strain during the holiday period.