The tax-free childcare scheme is available to parents or carers who have children aged up to 11, or 17 if their child is disabled and for every £8 a parent or carer deposits into their account, they will receive a £2 top-up to the value of £500 every three months, or £1,000 if their child is disabled.
The tax authority states that eligible families can save money on their childcare benefit from a government top-up worth up to £2,000 every year or £4,000 a year if a child is disabled.
HMRC state that the 20% top-up is paid into the tax-free childcare account and is ready to use almost instantly, meaning parents and carers can use the money towards the cost of childminders, breakfast, and after school clubs, and approved play schemes.
In June 2021, about 308,000 families across the UK benefited from using tax-free childcare, but HMRC says that thousands of those eligible are missing out on this opportunity.
Myrtle Lloyd, director general for customer services, HMRC said: ‘As your children head back to school this autumn, don’t miss out on the opportunity to receive your 20% top-up to help pay for their childcare. It is quick and easy to sign up, just search ‘tax-free childcare’ on GOV.UK.’
HMRC reminds parents that the tax-free childcare is also available for pre-school-aged children attending nurseries, childminders, or other accredited childcare providers.
Parents and carers, who are returning to work after parental leave, can apply for a tax-free childcare account for that child before they need to start using it and families are able to start depositing money 31 days before they return to work.
By doing this HMRC says it can maximise the potential government top-up saving.
Childcare providers are also able to sign up for a childcare provider account through GOV.UK to receive payments from parents and carers via the scheme.