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
-
MONTHLY FOCUS: BUSINESS AND AGRICULTURAL PROPERTY RELIEF: WHAT DO THE NEW IHT RULES MEAN FOR YOU?
The inheritance tax treatment of businesses and farms changed fundamentally from 6 April 2026. The amount that can qualify for 100% business property relief and agricultural property relief is now capped, potentially leaving families with a significant tax bill for the first time. What has changed, and what should business owners and farmers be doing about it?
-
HMRC moves tax return registration into the digital age
A new and improved self-assessment registration service has been launched. What's changed?
-
Unpaid directors still face new tax return reporting
HMRC has clarified that company directors who are already required to submit a self-assessment tax return must provide details of their directorships for 2025/26 even where they received no salary, benefits or dividends. Directors of dormant companies can also be caught. What do you need to know?
This website uses both its own and third-party cookies to analyze our services and navigation on our website in order to improve its contents (analytical purposes: measure visits and sources of web traffic). The legal basis is the consent of the user, except in the case of basic cookies, which are essential to navigate this website.