HMRC additional childcare support on offer

HMRC additional childcare support on offer

In January 2022, the government announced that it would be offering an additional top-up towards the cost of childcare. The top-up, worth up to £2,000 per year, is available when parents sign up to Tax-Free Childcare.

Tax-Free Childcare – the 20% childcare top-up – provides eligible working families with up to £500 every 3 months (or £1,000 if their child is disabled) towards the cost of holiday clubs, before and after-school clubs, childminders and nurseries, and other accredited childcare schemes.

Tax-Free Childcare is available for children aged up to 11, or 17 if the child has a disability. For every £8 deposited into an account, families will receive an additional £2 in government top-up.

Tax-Free Childcare is also available for pre-school-aged children attending nurseries, childminders, or other childcare providers. Families with younger children will often have higher childcare costs than families with older children, so the tax-free savings can really make a difference.

Each eligible child requires their own Tax-Free Childcare account. If families have more than one eligible child, they will need to register an account for each child. The 20% government top-up is then applied to deposits made for each child, not the household.

Account holders must also confirm their details are up to date every 3 months to continue receiving the government top-up.

How can the extra childcare support benefit you?

If you are self-employed with children, we know that childcare is of the utmost importance to you. With this scheme, it becomes less of a worry. Tax-Free Childcare will enable you to carry on working where you may have had to take time off if you didn’t have childcare.

If you’re self-employed, as long as, on average in the next three months, or across the whole current tax year, you meet the £152 a week minimum, you will qualify. You must also earn less than £100,000 per year to qualify. However, if you’ve been self-employed for less than 12 months, the minimum income requirement doesn’t apply to you.

Many of our customers are self-employed, so this scheme may benefit them. We help freelancers and contractors fully understand their financial affairs. We provide real-time financial status information and unique personal advice for each and every contractor.

If you would like to find out about any of the services below, get in touch on 01625 919162 and our experienced advisors will be available to talk through your options.