We know that the last year has been difficult for parents, with the summer holidays looming and many parents just having found their routine again with work, extra help is always welcome. HMRC has added a financial benefit and reminded parents that “a childcare top-up can go a long way towards helping parents plan and pay for summer activities to keep their kids happy and healthy”.
Parents need to be eligible for the scheme (broadly speaking that depends on whether parents are working and what their income is). For every £8 deposited into the child’s account, each family will receive an additional £2 top-up from the government (capped at £500 every 3 months, or £1000 if the child is disabled.)
The tax-free Childcare is available for children aged up to 11, or 17 if the child has a disability. Parents can apply for an account at any time, but will need to be earning at least the National Minimum Wage for 16 hours a week on average. Account holders must confirm their details every 3 months to be able to continue receiving the top-up, and each child must have their own account.
What does it mean for families? The phrase “every little helps” certainly springs to mind. For many families, parents do need to work, and childcare costs for the whole summer can be very expensive. The Reminder that summer camps and holiday childcare can be included will be welcome to many.
For more tax and accounting information, please keep reading our weekly Tuesday blog. AIMS is present across the UK to help families and businesses looking for a local accountant, please get in touch for more information.