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How the government is trying to cut your summer holiday childcare bill

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Working parents worried about childcare during the school holidays are being reminded they can use the government’s Tax-Free Childcare scheme as well as the ‘30 hours free’ initiative to pay for clubs and camps.

Almost a third of parents in the UK feel stressed trying to arrange childcare for the school holidays, according to a YouGov poll on behalf of HMRC.

A further third of British parents worry about balancing their job and school holiday childcare and more than half – 54% – admit they look forward to their kids returning to school in September.

But parents can use Tax-Free Childcare (the new initiative, replacing the old Childcare Vouchers scheme), which could leave them with an extra £2,000 per child each year.

More than 58,000 registered childcare providers including schools, football, art and tennis clubs, have signed up to accept Tax-Free Childcare payments, HMRC said.

Parents who pay into their account regularly can ‘save up’ their Tax-Free Childcare allowance and use it for childcare during school holidays.

Parents can apply for Tax-Free Childcare and 30 hours free childcare at the same time (both schemes can be used together), and both are available to self-employed parents.

Chief Secretary to the Treasury, Liz Truss, said: “Organising childcare for school holidays is important for parents. Tax-Free Childcare and 30 hours free childcare help make things easier by cuttings thousands of pounds from the childcare bills of working parents.”

How Tax-free Childcare works

  • The government gives eligible families an extra 20% towards the cost of childcare. So, if you pay £8 into your account, the government will give you an extra £2.
  • You can put up to £10,000 into your account a year, which means your top-up could be as much as £2,000 per child per year (or £4,000 for disabled children).
  • The top-up is added instantly, and you can then send electronic payments directly to your childcare provider.
  • The maximum government top-up is £500 per quarter, or £1,000 if the child is disabled.
  • All registered childcare providers – nannies, nurseries, childminders, clubs – can sign up to receive parents’ payments through Tax-Free Childcare.
  • You need to sign back into your account every three months and confirm your details are up-to-date to keep getting the government top-ups.

Are you eligible?

You can apply for Tax-Free Childcare if:

  • You’re a working parent (including self-employed)
  • You have children under 12 (under 17 for disabled children)
  • You, and any partner, both earn at least £125 per week
  • You, and your partner, earn less than £100,000. If one or both of you earns more than £100,000, neither of you is eligible.

How 30 hours free childcare works

  • Eligible families get 30 hours a week of free childcare for 38 weeks of the year. That’s a total of 1,140 hours per year.
  • The hours can be used flexibly with one or more childcare provider.
  • It is a further 15 hours on top of the universal 15 hours free childcare entitlement.
  • You can take up a 30 hours place the term after your child turns three and the date you receive a 30 hours code – whichever is later. Term start dates are 1st September, 1st January and 1st April.
  • You have to apply in good time to get your code. You can apply up to 16 weeks before your child turns three.
  • If you already get 30 hours free, you need to reconfirm you are eligible every three months.

Are you eligible?

You can apply for 30 hours free childcare if:

  • You have a three or four-year-old child
  • You, and your partner, earn the equivalent of working 16 hours a week at your national minimum wage (£125 at the National Living Wage). If you’re on maternity, paternity or adoption leave, you may still be eligible.
  • You, and your partner, earn less than £100,000. If one or both of you earns more than £100,000, neither of you is eligible.

To apply for either scheme, click here:

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