Don’t miss out on Tax-Free Childcare
HMRC has reported that over 400,000 families used the Tax-Free Childcare (TFC) scheme in December. Now it's urging families to check their eligibility so they don’t miss out. What’s the full story?

Childcare voucher schemes used to be very popular, but have been closed to new applicants for several years. In their place, the government introduced TFC - financial support for working families with children up to the age of 11, or 16 if they have a disability. TFC requires an eligible family to open a TFC account which is used to pay childcare costs. The financial support comes from a top-up by the government. For every £8 paid into a TFC account, the government adds £2. This is restricted to contributions of £500 for each child every three months (£1,000 in the case of a disabled child).
HMRC’s latest press release states that over 400,000 families used the scheme in December 2022, receiving £41.5 million in top-up payments. It's urging families to check eligibility and apply. However, if you are in receipt of childcare vouchers (still available to those in schemes prior to 4 October 2018) you might be better off. It’s crucial to understand that if you successfully apply for TFC, you will not be able to revert to vouchers if your circumstances change, e.g. if your or your partner’s income increases above the £100,000 maximum for TFC. You can use this tool to check the best option for you.
Related Topics
-
Was a company buyback of EIS shares tax avoidance?
Two taxpayers used the “purchase of own shares” procedure to extract gains they’d made from enterprise investment scheme (EIS) shares. HMRC said this was unfair tax avoidance, the taxpayers disagreed. What did the Upper Tribunal decide?
-
HMRC’s new compliance check service
HMRC has published a collection of videos and notes to help if you’re picked for a compliance check. Is HMRC’s new service worth a look or is it just official propaganda?
-
Income sharing trouble for separated couple
After a couple separated one spouse received income from letting the property she jointly owned with her estranged spouse. HMRC taxed all the income on her. Was it right to do so or should her spouse have been taxed on half the income?