Thousands missing out on Tax-Free Childcare bonus

Tax-Free Childcare (TFC) permits parents and carers who have children aged up to 11 (17 for children with disabilities) to pay their childcare provider via the scheme and receive a 20% government top-up on any money deposited.

Under TFC the tax relief available is 20% of the costs of childcare up to total childcare costs of £10,000 per child per year. The scheme is therefore worth a maximum of £2,000 per child (£4,000 for a disabled child).

To qualify for TFC all parents in the household must generally meet a minimum income level, based on working 16 hours a week (on average £142 a week), each earn less than £100,000 a year and not already be receiving support through Tax Credits or Universal Credit.

'Help is available towards the cost of childcare,' said Myrtle Lloyd, Director General for Customer Services at HMRC.

'Families using TFC to pay their childcare provider are already benefiting from the 20% government top-up on deposits, and you could too.'