Don’t miss out on Tax-Free Childcare
HMRC has reported that over 400,000 families used the Tax-Free Childcare (TFC) scheme in December. Now it's urging families to check their eligibility so they don’t miss out. What’s the full story?
Childcare voucher schemes used to be very popular, but have been closed to new applicants for several years. In their place, the government introduced TFC - financial support for working families with children up to the age of 11, or 16 if they have a disability. TFC requires an eligible family to open a TFC account which is used to pay childcare costs. The financial support comes from a top-up by the government. For every £8 paid into a TFC account, the government adds £2. This is restricted to contributions of £500 for each child every three months (£1,000 in the case of a disabled child).
HMRC’s latest press release states that over 400,000 families used the scheme in December 2022, receiving £41.5 million in top-up payments. It's urging families to check eligibility and apply. However, if you are in receipt of childcare vouchers (still available to those in schemes prior to 4 October 2018) you might be better off. It’s crucial to understand that if you successfully apply for TFC, you will not be able to revert to vouchers if your circumstances change, e.g. if your or your partner’s income increases above the £100,000 maximum for TFC. You can use this tool to check the best option for you.
Related Topics
-
Alternative education providers can protect VAT refund claims
HMRC has confirmed that some alternative providers of higher and further education can submit VAT refund claims following a Court of Appeal ruling, despite HMRC appealing the decision to the Supreme Court. What do you need to know?
-
Old IHT forms will be rejected
HMRC has stopped processing old versions of the Inheritance Tax IHT100 forms from 31 August 2026. Anyone reporting an IHT chargeable event involving a gift or trust will need to make sure they are using the correct forms. What do you need to know?
-
The tax incentive to do a thorough stock-take
The annual stock-take isn’t exactly your favourite thing to do. You know resources could be better spent elsewhere so you try to get through it as quickly as possible. Why might it be worth a little more of your time?
This website uses both its own and third-party cookies to analyze our services and navigation on our website in order to improve its contents (analytical purposes: measure visits and sources of web traffic). The legal basis is the consent of the user, except in the case of basic cookies, which are essential to navigate this website.