Image shows a group of children playing outside
Childcare support for the holidays and beyond

With the school holidays coming to an end in most of the UK, and Scottish schools already back, finding ways of entertaining children until they can be collected after school can be a challenge. But help is at hand for working parents or guardians in the form of Tax-Free Childcare (TFC). Make sure that your employees are aware of the potential benefits this offers.

TFC is a Government-backed scheme allowing parents to save money on the cost of their childcare. This includes after-school clubs as well as nurseries, registered childminders and holiday clubs. 

The scheme is available for parents of children up to age 11, or up to age 16 if the child is disabled. Parents need to set up an online account and add their payments into it. Their contributions into the TFC account are then topped up by the Government with the equivalent of basic rate tax. This means that for every £8 working parents pay into their account, the Government adds an extra £2. The Government will make top ups in this way up to a maximum of £500 a quarter for each child, or £1,000 a quarter if the child is disabled.

TFC is available to working parents earning at least the National Minimum Wage but less than a higher income threshold of £100,000. This upper threshold is based on the individual’s adjusted net income so parents can make adjustments for gift aid and pension contributions. Further details on eligibility for TFC are available online, and apply to both adults in a two-parent household.

A handy step-by-step guide to TFC has been published to guide parents through eligibility, how applying for TFC might affect other benefits, making the claim, and the requirement to confirm every quarter that their details are still up-to-date.

The ATT has created a short video on TFC, which sets out the key information parents need to know, and how to apply.

 

This article reflects the position at the date of publication. If you are reading this at a later date you are advised to check that that position has not changed in the time since.  

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