Are you paying for childcare this Easter?

Many families see the cost of childcare rise during the school holidays so make sure you are claiming financial support toward your registered childcare costs this Easter.

Most working parents are eligible for financial support with their registered childcare costs, yet our Family Benefits Advice Service speaks every day to parents who aren’t aware that they could be claiming financial support towards the cost of their childcare.

Registered childcare costs can include childminders and day nurseries, breakfast and afterschool clubs, as well as some holiday schemes.

Many parents are missing out on £1000s in financial support. Uptake of the Tax-Free Childcare scheme, which replaced Childcare Vouchers, remains low with families in Northern Ireland accounting for just 2% of Tax-Free Childcare users across the UK – and we believe that many more families here could benefit from this form of support.

There are a range of support schemes towards childcare costs and we would encourage all parents to make sure they are receiving all the financial support they are entitled to with their childcare costs, and to check regularly that they are receiving the best form of support for their family which may change over time depending on the family’s circumstances.

What is Tax-Free Childcare?

The Tax-Free Childcare scheme allows eligible working families to claim 20% of their registered childcare costs, up to £2,000 per child per year, or £4,000 for a child with a disability, from HMRC.

For a family to be eligible, both parents need to be working (or one person in a single parent household), earning between £152 per week (equivalent to 16 hours working at the National Living Wage) and £100,000 per year each. So, for example, a household where each parent is earning £95,000 (combined income of £190,000) would be eligible.

Self-employed parents are also eligible for Tax-Free Childcare. Households where one parent is working, and the other parent is in receipt of Carer’s Allowance or certain disability benefits can also qualify.

The scheme is available to parents of children under the age of 12 (or age 17 for children with disabilities).

Savings are not taken into account in determining if a parent is eligible for Tax-Free Childcare.

How does Tax-Free Childcare help with childcare costs?

Parents must register for an online childcare account through the HMRC portal available via www.childcarechoices.gov.uk. You will need to have a Government Gateway account set up. It takes approximately 20 minutes to apply for a childcare account, and you’ll need details for yourself and your partner (if applicable) including date of birth and National Insurance Number. You can then set up an account for each of your children.

For every £8 you pay into your child’s Tax Free Childcare account, the Government will pay in a top up of £2, up to a maximum of £2,000 per year per child, £500 per quarter. So the amount of savings through Tax-Free Childcare a family will make depends on their registered childcare costs – the scheme will be most beneficial for families who have higher childcare costs, as they will be able to claim a higher amount in support.

Payments are made directly to the childcare provider from each child’s online Tax-Free Childcare account.

For more detailed information you can download our Comprehensive Guide to Tax-Free Childcare from our website.

How will I know what is the best form of support for my family?

In addition to Tax-Free Childcare other forms of support towards registered childcare are available – these are:

• Childcare Vouchers
• Universal Credit
• Tax Credits.

It can be complex to work out which scheme will provide the best support. We are here to help – our Family Benefits Advice Service can do a calculation taking into account household circumstances, income and childcare costs and to help families to work out what is the best form of support for them.

For more information on help towards registered childcare costs or if you would like to find out if what is the best form of support with your family’s registered childcare costs, contact the Family Benefits Advice Service on Freephone 0800 028 3008 or hello@employersforchildcare.org.