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.


xero quickbooks.png sage.png kashflow.png
Copyright

© 2021 Mark J Rees LLP. All rights reserved.

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

Please call:
0116 2549018

Address
Mark J Rees LLP, Granville Hall, Granville Road, Leicester, Leicestershire LE1 7RU

Mark J Rees LLP is a Limited Liability Partnership Registered in England & Wales Number OC362074. A list of members’ names is available at the business address. MJR, Mark J Rees and MJR Wealth Management are trading styles of Mark J Rees LLP which is registered to carry on audit work in the UK by the Institute of Chartered Accountants in England and Wales and authorised and regulated by the Financial Conduct Authority.

‘Partner’ refers to a director of a corporate member.