Parents warned 'don't miss out' on £2,000 HMRC boost
Thousands of families are missing out on financial support from the government
Parents are being urged to claim up to £2,000 annually towards their childcare expenses, as fresh data reveals hundreds of thousands of families are failing to access the available support. HM Revenue and Customs (HMRC) revealed that 571,945 families received payments through the Government's Tax-Free Childcare scheme in June, securing an average of £100 monthly towards nursery, childminder or after-school club fees.
However, experts have said that "too many still miss out" on the assistance, which can prove decisive in whether parents return to employment or remain at home. The scheme works by the Government contributing £2 for every £8 families pay in, capped at a maximum of £2,000 annually per child under 11, or £4,000 for disabled children up to 16.
Philly Ponniah, a financial adviser at Philly Financial, said: "Childcare costs are one of the biggest financial pressures facing working parents, and too many still miss out on help they're entitled to. Schemes like Tax-Free Childcare can make a real difference, but the system is confusing. Many don't realise it's separate from the 15 or 30 funded hours, but can be claimed as well - even for after-school clubs and holiday camps."
She informed Newspage the support "can mean the difference between returning to work or staying home", whilst noting that until childcare becomes "simpler, clearer and more affordable upfront", escalating costs will continue influencing parents' decisions and the UK's declining birth rate. 'A lifeline for solo parents'.
Single mum Kate Allen, who runs Kingsbridge-based Finest Stays, revealed she only stumbled upon the scheme after two years: "As a solo parent who's benefited from the Tax-Free Childcare scheme, I can say the impact is massive. For every £8 you pay in, the government adds £2 - that's a 20% boost straight towards nursery or childcare costs."
"Childcare costs can be crippling, yet too few families are aware of this support. It's completely separate from the 30 free hours scheme, and both can be used together to make a real difference."
David Stirling, an adviser at Belfast-based Mint Wealth, said: “HMRC says claim your treats and don’t get tricked out of your childcare savings. With childcare being one of the biggest costs for working families, it’s important to take advantage of schemes like this.
"Hopefully this will relieve some pressure on beleaguered Brit household finances and make working more viable for parents, especially mothers who are more likely to reduce hours or sacrifice careers because of childcare costs.”
Financial adviser Ben Perks, from Orchard Financial Advisers in Stourbridge, said the system is “broken”, adding: “When it makes more sense not to work than pay childcare costs, something’s broken. Our economy needs workers, yet many parents don’t work because childcare costs are equal to their wages.
"It’s great that there’s some support in place, but more needs to be done to reduce the fees nurseries charge and help them cut costs.”
The Tax-Free Childcare scheme can be used alongside the 30 hours free childcare offer. HMRC said families can apply online through its childcare account service here.