Nearly 1million families still missing out on up to £2,000 free cash for childcare – can you claim

ALMOST a million families are still missing out on up to £2,000 a year in free cash for childcare from the government.

New figures from HM Revenue and Customers reveal over 400,000 families saved money on the Tax-Free Childcare scheme in December 2022.

But that means there are roughly 900,000 families that could be claiming the help and still aren't.

Myrtle Lloyd, from HMRC, said the government department was keen to "help families get the most out of their finances" and tax-free childcare was one way of doing that.

It comes as new figures from the Early Years Alliance found nine out of 10 nurseries will raise fees by £1,000 this year,

What is tax-free childcare?

Tax-free childcare is a government scheme where parents or guardians can get £2 free for every £8 put in to an account.

Parents can get up to a maximum of £2,000 a year per child or £4,000 if their child is disabled.

The child has to be 11 or younger, or 16 if they are disabled.

The money has to be used to pay for childcare, including nursery, childminders, break or after school clubs.

It can be used to pay for holiday care or an out of school activity too.

As an example, if your childcare costs are £750 a month, you could pay £600 into your childcare account and the government would pay in £150.

Not only are you covered each month, you'd be saving £1,800 a year per child.

It's worth doing the maths yourself to figure out how much you should be putting into your account each month.

Who is eligible and how can I claim?

Whether you are eligible or not for tax-free childcare depends on your personal circumstances, including your income.

But, you can still get help if you are working, including if you are self-employed.

You and your partner need to be earning the equivalent of 16 hours a week at the national minimum or living wage.

But, if one of you earns over £100,000 or more a year you won't qualify.

This does mean you can qualify for tax-free childcare if you earn £99,999 a year or less though.

Remember, you can claim tax-free childcare at the same as 30 hours of free childcare.

But you can't claim under the scheme if you are on tax credits, Universal Credit or receiving childcare vouchers.

You can apply for the scheme online via the government's website.

The application process should take around 20 minutes and you'll need your National Insurance and Unique Taxpayer Reference (UTR) number to hand (if you are self-employed).

What other childcare help can I get?

It's not just the tax-free childcare scheme that entitles parents and guardians to extra financial help.

Here are some other ways to get help with childcare.

Free childcare hours

Families in England can get 30 hours free childcare from the government if they have a child aged three or four.

There are different schemes in Scotland, Wales and Northern Ireland.

You can get the 30 hours free for every week of the year where your children should be in school - 38 weeks.

But the childcare must be with an approved provider and stops when your child starts Reception at school.

There's no fixed eligibility though as it depends on if you are working, your income, your child's age and circumstances and your immigration status.

For full details, you should check out the government's website.

If you are on Universal Credit or Tax Credits

Households on Universal Credit or Tax Credits can get extra help with childcare costs.

If you are on Working Tax Credits, the claimant and their partner have to work at least 16 hours a week.

If you are on Universal Credit you may be able to claim back up to 85% of your childcare costs.

The most you can get back each month is £646 for one child and £1108 for two or more children.

If you already claim tax credits, you can add an extra amount of Working Tax Credit to help cover the cost of childcare.

Your child has to be in approved childcare though.

You can apply for help on the government's website.

Do you have a money problem that needs sorting? Get in touch by emailing money-sm@news.co.uk