Don’t miss out on the Tax-Free Childcare program!
According to HMRC, more than 400,000 families utilised the Tax-Free Childcare (TFC) scheme in December, and they are now encouraging other eligible families to check their eligibility and take advantage of it.
In the past, childcare voucher programs were popular, but they have been closed to new participants for many years. In their place, the government created TFC, which provides financial assistance to working families with children up to the age of 11 (or 16 if they have a disability).
An eligible family must establish a TFC account, which is used to cover childcare costs. The government provides financial assistance by contributing to the account. For every £8 deposited into a TFC account, the government adds £2, up to a limit of £500 for each child every three months (or £1,000 for a disabled child).
In its latest press release, HMRC revealed that in December 2022, over 400,000 families received £41.5 million in top-up payments through the program. Families are encouraged to check their eligibility and apply.
However, if you are currently receiving childcare vouchers (still available to those in schemes prior to 4 October 2018), you may be better off sticking with them. It is important to note that if you successfully apply for TFC, you will not be able to switch back to vouchers if your circumstances change, such as if your income or your partner’s income exceeds the £100,000 maximum for TFC.
You can use this tool to determine the best option for your family!
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The Team at London Accountants