Parents and carers are reminded they could be granted a £2,000 subsidy on childcare costs as the cost of living reaches a 30-year high.
HM Revenue and Customs (HMRC) is encouraging people to check if they can apply for Tax-Free Childcare, ahead of February half term, the Mirror reports.
Up to 1.3 million families are estimated to be eligible for the support, but recent figures show just 316,000 households currently claim it.
READ MORE: Universal Credit could be scrapped with everyone given £163 a week instead
Tax-Free Childcare is available for children aged up to 11, or 17 if the child has a disability.
For every £8 deposited into an account, families will receive an additional £2 in government top-ups.
This money must then be spent on a registered childcare provider, such as nurseries, nannies, after school clubs and play schemes.
Your childcare provider must be signed up to the scheme.
Who is eligible?
Tax-free childcare eligibility depends on a few factors, including if you are working, your income and the age of your child and their circumstances.
The current rules state you need to be earning at least the national minimum wage or living wage, for the equivalent of 16 hours a week.
If you have a partner, they will need to earn this amount too.
Self-employed workers are also eligible for tax-free childcare help - but again, they'll need to be earning the above amount.
If you’re self-employed and aren't expecting to make enough profit in the next three months, you can use an average of how much you expect to make over the current tax year.
Both yourself and your partner will also have to earn less than £100,000 a year to qualify for the scheme, and you cannot have two accounts for the same child.
You usually have to be working to claim tax-free childcare, but there are some exceptions.
You may still be able to claim if one of you is working and the other gets Incapacity Benefit, Severe Disablement Allowance, Carer’s Allowance or Employment and Support Allowance.
How much could I get?
If you qualify for the support, you can get up to £500 every three months - up to £2,000 a year - for each of your children.
For disabled children, the maximum amount you could get rises to £4,000.
To use the tax-free childcare scheme, you need to set up an online government account where you pay in your own money.
Depending on how much you deposit, the government then tops up your account with a bonus amount, up to the limits mentioned above.
How do I apply for tax-free childcare?
You can apply for the tax-free childcare scheme on the Gov.uk website.
When applying, you'll need to provide information about yourself, such as your National Insurance number, as well as your individual circumstances.
Don't forget, parents of three and four-year-olds can apply for 30 hours free childcare a week.
Receive newsletters with the latest news, sport and what's on updates from the Liverpool ECHO by signing up here
