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
-
Why is HMRC checking PVA more often?
Your business imports goods and accounts for VAT by applying postponed VAT accounting (PVA) on its returns. HMRC is scrutinising returns and issuing large assessments in some cases. What can you do to reduce the risk of getting it wrong?
-
HMRC text or scam? Check before you act
HMRC is contacting some taxpayers by text this week about overdue Self Assessment liabilities and is also sending updates about VAT registration applications. At the same time, it has expanded its guidance on spotting fake HMRC messages on social media. How can you tell whether a message is genuine?
-
Received a P800? Check how HMRC has used your allowances
Some HMRC P800 tax calculations can produce too much tax where a taxpayer has several different types of income and allowances are not allocated in the most favourable way. People with employment or pension income alongside savings, dividends or other income are particularly at risk here. Could HMRC be charging you too much?
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.