There has been five-fold increase in the number of families in Wallasey using their Tax-Free Childcare accounts to pay for their childcare costs.
The government top-up is worth up to £500 every three months and, in the Wallasey constituency, there are now 465 families taking part, up from just 85 families three years ago.
Tax-Free Childcare allows parents or carers who have children aged up to 11, or 17 if their child is disabled, to pay their childcare provider through the scheme, and receive a 20% government top-up on any money deposited.
Councillor Paul Hayes said: “The tax-free savings on childcare costs can give much needed financial support to families affected by the pandemic. If parents and carers’ working patterns have changed because of COVID-19 or they have received either furlough payments or the Self-Employment Income Support Scheme grant, they may still be eligible to receive Tax-Free Childcare.
“For every £8 per child a parent or carer deposits, they will receive £2 in top-up, up to the value of £500 every three months, or £1,000 if their child is disabled. That equals £2,000, or £4,000 for the care of a disabled child, for a whole year. The top-up is paid directly into the child’s account and is ready to use almost instantly.”
As children across the UK return to school, families can use the money to pay their childcare provider including childminder fees, after school clubs or sports activities, where the childcare provider has signed up to Tax-Free Childcare. Families could also save money now to earn the government top-up and use the money to pay for childcare, summer camps and play schemes during school holidays.
Myrtle Lloyd, HMRC’s Director General for Customer Services, added: “As children return to their schools, after-school clubs and nurseries, help is available towards the cost of childcare.
“Families using Tax-Free Childcare to pay their childcare provider are already benefiting from the 20% government top-up on deposits, and you could too. To find out more search ‘tax-free childcare’ on GOV.UK.
“Tax-Free Childcare is also available to families with pre-school aged children attending nurseries, childminders or other childcare providers.
Parents and carers can check their eligibility and register for Tax-Free Childcare via GOV.UK while childcare providers can also sign up for a childcare provider account via GOV.UK to receive payments from parents and carers via the scheme.
Account holders must confirm their details are up to date every three months to continue receiving the government top-up.
