Maximise Savings: Tax-Free Childcare for Working Families

Tax-Free Childcare: An Important Benefit for Working Parents

As the new academic year approaches, working families are encouraged to take advantage of the government’s Tax-Free Childcare scheme. This initiative provides significant financial assistance, offering up to £2,000 per child per year towards childcare costs, and up to £4,000 annually for families with disabled children. With many children preparing to start school, now is the time for parents to ensure they’re maximising this valuable resource.

What Is Tax-Free Childcare?

Tax-Free Childcare is a government support programme that helps families meet the costs of wraparound care, after-school clubs, and holiday camps. It is designed to ease the financial burdens that often come with organising childcare, particularly at the start of the school year.

Eligibility at a Glance

Families could be eligible if they meet the following criteria:

• Have a child aged 11 or under (support extended until the 1st of September after their 11th birthday; for disabled children, support extends to the 1st of September after their 16th birthday)
• The parent and their partner (if applicable) each earn, or expect to earn, at least the National Minimum or Living Wage for 16 hours per week on average
• Each parent earns less than £100,000 per year
• Neither parent receives Universal Credit or childcare vouchers

Table: Tax-Free Childcare Support Overview

Child Type	Maximum Annual Support
Standard	£2,000
Disabled	£4,000

Key Reminders for Parents

• Sign up on GOV.UK to activate benefits and start saving
• Consider your family’s income and current childcare arrangements when determining eligibility
• Check for updates or changes to the scheme before each new school year

Insights from the Treasury and HMRC

Darren Jones, Chief Secretary to the Treasury, explained the scheme’s importance: “Through our Plan for Change, we are putting more money into the pockets of working people, worth up to £2,000 per year through Tax-Free Childcare. This will make it easier for parents to get back into work as we go further and faster to grow the economy.”

Myrtle Lloyd, HMRC’s Director General for Customer Services, added: “Starting school can be an expensive time, there’s a lot to buy and there’s also a lot to organise. Now you know where your child is going to school you can start organising your childcare and Tax-Free Childcare can help make the costs more manageable. Sign up to start saving today on GOV.UK.”

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Take Action:

• If you have not yet registered, visit GOV.UK and sign up for Tax-Free Childcare immediately
• Review your eligibility and consider speaking to a financial adviser or your childcare provider for guidance
• For tailored contracting advice, contact Lauren at 01206 591 000 or lauren.monks@contractorumbrella.com

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The Bottom Line

Tax-Free Childcare is a vital resource for working families, helping to manage the costs of school clubs and childcare, and supporting parents returning to the workforce. Take advantage of this scheme to ensure that your family receives the support it needs as the new school year begins.