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Families warned they could be missing out on thousands of pounds a year

Families warned they could be missing out on thousands of pounds a year

A huge number of families are missing out on thousands a year

Whenever we see the dreaded acronym HMRC, we usually feel a shiver down our spines.

We’re used to giving them our hard earned cash - not being advised on how to save or seek support.

Yet in the golden age of Martin Lewis and his money saving tips, maybe theres a welcome change on the horizon.

Today, the handy advice applies to families.

The tax office has issued a very helpful tip in light of the statistics which show that thousands of families are missing out on up to £4,000 a year.

What is the scheme for?

The money in question is for childcare support, something everyone knows can cost an arm and a leg.

It's also on a lot of parents' minds right now as the Easter break looms.

The government’s tax-free childcare scheme should be taken advantage of by all who are eligible - and records state 1.3 million families qualify, but only 800,000 have claimed it.

How does it work?

The way the scheme works is by using an online account, accessed via the website.

Parents and/or guardians pay into the account, and the government adds top-up payments.

The scheme is aimed at ‘working families’.

For every £8 you pay, the government will add in £2.

You can then put this money towards childcare costs. The hang up is that it must be with a registered provider – nurseries, nannies, after school clubs and play schemes.

HMRC says it takes only 20 minutes to apply, and can done entirely online.

Account holders may deposit money immediately, so it is ready to be used whenever it is needed, while unused money in your account can be withdrawn at any point.

This scheme is incredibly beneficial to families, as it helps to pay for childcare for children up to the age of 11 – or up to 16 if the child has a disability.

How much money can I expect?

Once your eligibility has been confirmed, you can expect up to £500 every three months - totalling £2,000 a year - per child.

If your child is disabled you could receive a higher amount of £1,000, or up to £4,000.

You must make sure the details on your account are up to date keep receiving the government top ups.

both you and your partner must learn below £100,000 a year to pass eligibility.

Who is eligible?

The scheme is aimed at ‘working families’ – so you will not be able to receive this help if you are claiming Tax Credits, Universal Credit or childcare vouchers.

There are, however, some exceptions for those who are not currently in work. For example, you may still be able to claim if, in a relationship, one of you is working and the other gets Incapacity Benefit, Severe Disablement Allowance, Carer’s Allowance or Employment and Support Allowance (ESA).

You must earn at least the minimum wage, for the equivalent of 16 hours a week. Your partner must be able to match that if you’re in a relationship.

Self-employed workers are also entitled to support from this scheme, providing they earn the same amount.

For those in relationships, both you and your partner must learn below £100,000 a year to qualify.

Speaking of the helpful scheme, HMRC’s director general for customer services, Myrtle Lloyd said: "Springtime is a good opportunity to take a fresh look at family finances. A quick check online and you can find out how Tax-Free Childcare can help cut the cost of your childcare bills.”

She concluded by saying: “Every bit of financial support helps – I would urge families to ’hop to it’ and search ‘Tax-Free Childcare’ on GOV.UK to find out how you could be better off and open your account today.”

You can apply for the scheme on the gov website here.

Featured Image Credit: miniseries/Getty Images/Guido Mieth/Getty Images

Topics: Money, UK News