Workers can claim up to £2,000 a year towards childcare costs by signing up to the Tax-Free Childcare scheme, it has been reminded.

HM Revenue & Customs (HMRC) said thousands of families may be missing out on free cash each month.

If you are unfamiliar with the scheme, here’s what you need to know.

What is Tax-Free Childcare?

Working parents can claim up to £500 every three months – up to a maximum £2,000 a year – for each of their children (aged up to 11) to help with the costs of childcare.

This increases to £1,000 every three months if the child (up to the age of 17) is disabled.

According to the latest statistics, nearly 316,000 working families benefit from Tax-Free Childcare each month.

How does it work?

For every £8 you pay into this account, the Government will pay in £2 to use to pay your provider. The cash can be used to pay for approved childcare, such as childminders, nurseries, nannies, after school clubs, and play schemes.

All taxpaying parents can use the scheme, providing they earn less than £100,000 a year.

How do I apply?

To claim, you will need to register for a Tax-Free Childcare Account.

“A helping hand with childcare costs”

Commenting on the scheme, Helen Whately, Exchequer Secretary to the Treasury, said: “Whether it’s for holiday clubs, breakfast clubs, or childminders and nurseries, Tax-Free Childcare is a great offer that gives working parents a helping hand with their childcare costs.

“This Government is committed to supporting working families which is why it’s fantastic that thousands more are saving money through the Tax-Free Childcare scheme. I urge as many parents as possible to take advantage of this support.”

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