Don't miss out on childcare tax benefit - expert

A Sutton Coldfield financial expert is urging parents to ensure they do not miss out on tax-free support for child care - after 400,000 signed up for the Government scheme.

Mike Jordan (pictured), founder of Jordan Financial Management, Sutton 's longest established firm of independent financial advisors, said that families could be missing out on top-ups to help pay for approved childcare.

He said: “The cost of living crisis is having a real impact on families, and the cost of childcare can be a significant outgoing - but there are plenty of parents who don 't realise they may be eligible for this help from the Government.

“Government Childcare Vouchers have been closed to new applicants since 2018, but their replacement, Tax-Free Childcare, or TFC, is now available.

“According to the latest figures, around 400,000 families used TFCs in December, but there are concerns that not enough people know about them and are failing to claim the support they are entitled to.

“TFC is Government financial support for working families with children aged up to 11, or up to 16 if their child has a disability.

“The government top up can be used to pay for approved childcare including things like child minders and nurseries, holiday clubs or breakfast and after school clubs. In this climate, they can make a real difference. ”

UK childcare costs are already among the most expensive in the world, with full-time fees for a child under two at nursery reportedly reaching an average £269 a week last year - or just under £14,000 annually.

TFC requires an eligible family to open a TFC account which is used to pay childcare costs. The financial support comes from a top-up by the government. For every £8 paid into a TFC account, the government adds £2. This is restricted to contributions of £500 for each child every three months ( £1,000 in the case of a disabled child).

Account holders must confirm their details are up to date every 3 months to continue receiving the government top-up.

More than one million families in the UK are entitled to some form of government childcare support and the government is encouraging those eligible not to miss out on their entitlements.

However, Mike urged parents to check not only their eligibility but also to compare TFC to any existing support they are already receiving.

He said: “It 's important to bear in mind that if you are already on the old Childcare Vouchers, which are still available to those who joined schemes prior to October 2018, you might be better off staying as you are.

“It 's vital to understand that if you successfully apply for TFC, you will not be able to revert to Vouchers if your circumstances change. ”

Find out more about Tax-Free Childcare.