Parents are being told to ‘act quickly’ as the new tax year begins
Parents are being urged to take advantage of a tax-free childcare benefit available for children under 11 – and to act quickly as the new tax year begins, warns Robert King, director of nanny payroll specialists Nannywage Ltd.
He has shared: “The Tax-Free Childcare scheme allows working parents to save up to £2,000 per child annually on approved childcare costs, and up to £4,000 for children with disabilities. For every £8 deposited into the account, the government contributes an additional £2, up to £500 every three months, or £1,000 for disabled children.
“Parents should take advantage of this scheme, as it provides valuable financial relief, helping families manage childcare costs while maintaining flexibility to withdraw unused funds if circumstances change.” For money-saving tips, sign up to our Money newsletter here
How to apply
Families can apply online for Tax-Free Childcare on the government website in just 20 minutes.
Once the account is set up, parents can deposit money immediately and use it to cover costs for nurseries, childminders, breakfast or after-school clubs, or holiday activity clubs.
Any unused money can be withdrawn at any time.
Who is eligible for the scheme?
Parents must earn at least the equivalent of 16 hours per week at the National Minimum Wage or Living Wage and no more than £100,000 annually per parent.
The scheme is not available to those receiving Tax Credits, Universal Credit, or childcare vouchers.
For self-employed individuals or directors, additional proof of meeting minimum income requirements may be needed, such as accountant statements, invoices, wage slips, or bank statements.
This ensures the scheme supports those actively working and contributing to childcare expenses.
The scheme supports children aged 11 or under, or up to 16 if they have a disability.
Eligibility ends on September 1 after the child’s 11th or 16th birthday, depending on their circumstances.”
