Almost 1.4million families missing out on up to £2,000 a year tax-free childcare – here’s how to claim
MORE than a million families are missing out on tax-free childcare worth up to £2,000 a year per child, new figures by HMRC show.
The scheme is available to 1.5million families where the parents are earning at least the national minimum wage or living wage for 16 hours a week.
But despite coming into force in April 2017, as of March 2019, just 125,000 families have signed up.
This means at least 1.375million families are missing out on thousands.
This is higher than the BBC analysis in February that found that around 324,000 families could be missing out on the tax-free childcare.
In December 2018, only 91,000 families had claimed the tax-free childcare.
How to apply for tax-free childcare
YOU can use the Government's childcare calculator to work out what help you might be entitled to.
You can find this tool on .
If it looks like you will be eligible, you can .
You’ll need your details (and your partner’s, if you have one), including your national insurance number and unique taxpayer reference (UTR), if you’re self-employed
It takes 20 minutes to apply and you'll find out if you qualify within seven days.
Be aware that you have to apply for both tax-free childcare and 30 hours of free childcare at the same time.
If you're eligible you'll get a childcare account. You can use this to pay your childcare provider.
To continue getting the benefit, you must confirm your details are up to date every three months.
Meanwhile, new research by insurer Royal London shows the Treasury received 1,830 complaints about the Childcare Service from parents between November last year and the end of March this year - equivalent to one every daytime hour since the scheme was fully rolled out.
Tax-free childcare replaced the Government's childcare vouchers scheme, which closed to new applicants on October 5, 2018.
The scheme is available to working parents each earning at least the national minimum wage or living wage for 16 hours a week and less than £100,000.
To claim, kids need to be 11 or under or 16 and under if they're disabled.
If you're eligible, you get £2 for every £8 you pay towards childcare - and this can be on top of the 30 hours of free childcare three- and four-year-olds can get.
Cash is added by the Government upfront directly into parents' childcare accounts - although they will need to spend this on a registered childcare provider.
Parents could get more in help under childcare vouchers and only one parent needed to be working, but the self-employed qualify for tax-free childcare - a perk they previously missed out on.
Becky O’Connor, personal finance specialist at Royal London, said: "With the cost of full-time childcare for a two-year old exceeding the average monthly mortgage repayments in the UK, busy working parents need all the help they can get.
"The latest figures show not enough are getting that help and when they do, they encounter problems.
"The scheme remains poorly promoted and under-used."
Sarah Coles, personal finance analyst of Hargreaves Lansdown: "Tax-free childcare failed to deliver almost half the money that was expected last year – leaving cash-strapped parents facing the eye-watering cost of childcare alone.
"Just after the scheme was fully rolled out, the Office for Budget Responsibility estimated it would provide parents with an extra £200million in 2018/19.
"Today’s figures show it actually paid £117.1million, so parents missed out on almost £83million.
"But despite the disappointing take up, the more positive news is that the number of families using the scheme is growing steadily."
Meanwhile, a HMRC spokesperson said: "Tax-Free Childcare is a great offer for working parents and more and more families are benefitting from it.
"We’re urging all parents to check Childcare Choices to see how much they could save, and to apply.
"TFC is available to nearly 1 million more families compared to those using childcare vouchers when they closed to new entrants in October 2018, and many, such as the self-employed, can now receive support with their childcare costs for the first time.
"We are running a national communications campaign to raise awareness and encourage more parents to apply."
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Here's what tax-free childcare is, how to apply, and who is eligible.
Parents have been plagued with problems with the tax-free childcare scheme since its launch.
A glitch with the system last November left parents facing fines and childminders unpaid.
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