Low take-up of TFC linked to poor understanding of scheme

18 Feb 2020

Research commissioned by HMRC has suggested that low take-up of the Tax-Free Childcare (TFC) scheme is linked to a 'poor understanding' of the initiative.

Under the TFC scheme, relief is 20% of the costs of childcare, up to total childcare costs of £10,000 per child per year. The scheme is therefore worth a maximum of £2,000 per child (£4,000 for a disabled child). All children under 12 (up to 17 for children with disabilities) are eligible.

To qualify for Tax-Free Childcare all parents in the household must generally meet a minimum income level, based on working 16 hours a week (on average £131 a week) and each earn less than £100,000 a year and not already be receiving support through Tax Credits or Universal Credit.

According to the research, 1.3 million UK families are eligible for the TFC scheme. The study found that many families were unaware of the initiative, and others who were aware of TFC had poor understanding of its key aspects.

A handful of taxpayers believe other schemes are more suitable for their needs, and a small number prefer to use childcare vouchers, which are believed to provide additional benefits.

More information on TFC can be found here.

Register for our newsletter

Once a month we'll send you an email packed full of essential business news and handy tax tips to help save you money.

Register

Weston-super-Mare

34 Boulevard
Weston-super-Mare
Somerset
BS23 1NF

01934 415022

Cheddar

Bath Street
Cheddar
Somerset
BS27 3AA

01934 743274


Home | Contact us | Accessibility | Disclaimer & Privacy Policy | Help | Site map |

© 2020 Four Fifty Partnership. All rights reserved.

We use cookies on this website, you can find more information about cookies here.


Registered to carry on audit work in the UK by the Institute of Chartered Accountants in England and Wales. Details about our audit registration can be found at auditregister.org.uk under the reference C001092613.

"four fifty partnership" is a trading name of Four Fifty Partnership Limited. Registered in England. Company Number 5032008. Registered Office 34 Boulevard, Weston super Mare, Somerset BS23 1NF.

Directors: Richard Acreman BSc CTA, Joy Boswell FCCA FCA, Peter Ison BA FCA and Nick Gravell FCCA FCA.

Professional Indemnity Insurers: Nexus Underwriting Limited 52-56 Leadenhall Street, London EC3A 2EB (Policy Number: BC6210PIA194). The territorial coverage is worldwide excluding professional business carried out from an office in the United States of America or Canada and excludes any action for a claim brought in any court in the United States of America or Canada.