Families using their Tax-Free Childcare accounts to pay for their childcare costs are benefitting from a government top-up worth up to £500 every three months, HM Revenue and Customs (HMRC) has announced.

But there are thousands of families across the UK missing out on the chance to save money on childcare. They too could join almost 248,000 families across the UK who saved money using Tax-Free Childcare in December 2020, an increase of almost 43,000 families from December 2019, and received a share of more than £25 million in government top-up payments.

Tax-Free Childcare allows parents or carers who have children aged up to 11, or 17 if their child is disabled, to pay their childcare provider through the scheme, and receive a 20% government top-up on any money deposited.

For every £8 per child a parent or carer deposits, they will receive £2 in top-up, up to the value of £500 every three months, or £1,000 if their child is disabled. That equals £2,000, or £4,000 for the care of a disabled child, for a whole year. The top-up is paid directly into the child’s account and is ready to use almost instantly.

As children across the UK return to school, families can use the money to pay their childcare provider including childminder fees, after school clubs or sports activities, where the childcare provider has signed up to Tax-Free Childcare. Families could also save money now to earn the government top-up and use the money to pay for childcare, summer camps and play schemes during school holidays.

Myrtle Lloyd, HMRC’s Director General for Customer Services, said:

As children return to their schools, after-school clubs and nurseries, help is available towards the cost of childcare.

Families using Tax-Free Childcare to pay their childcare provider are already benefiting from the 20% government top-up on deposits, and you could too. To find out more search ‘tax-free childcare’ on GOV.UK.

Tax-Free Childcare is also available to families with pre-school aged children attending nurseries, childminders or other childcare providers.

The tax-free savings on childcare costs can provide much needed financial support to families affected by the pandemic. If parents and carers’ working patterns have changed because of COVID-19 or they have received either furlough payments or the Self-Employment Income Support Scheme grant, they may still be eligible to receive Tax-Free Childcare.

Childcare providers can also sign up for a childcare provider account via GOV.UK to receive payments from parents and carers via the scheme.

Further information

Latest Tax-Free Childcare statistics were released on 17 February 2021. Data is available up to December 2020.

Each eligible child requires their own Tax-Free Childcare account. If families have more than one eligible child, they will need to register an account for each child. The 20% government top-up is then applied to deposits made for each child, not household.

Account holders must confirm their details are up to date every three months to continue receiving the government top-up.

80% of last minute claims submitted by immigration offenders are eventually denied, new research published by the Home Office today has revealed.

The high proportion of migrants with no right to remain in the UK making late claims – including human rights, judicial reviews or modern slavery related submissions – has raised concerns that this is becoming a tactic to delay and eventually “time out” removal from the UK.

Commenting on the analysis, Minister for Immigration Compliance and Justice, Chris Philp, said:

We know that our asylum system is open to abuse by those who have no right to remain the UK and these stark figures just demonstrate the difficulties we face when seeking to remove people.

These last-minute claims waste the time of judges and our courts and delaying the process of assessing claims from the most vulnerable.

This is why we will comprehensively overhaul our asylum system and build one which is fair but firm. This will allow us to better protect and support those genuinely in need but remove more easily from the UK those with no right to be here.

The report published today is a snapshot of all those cases that were detained within the country under immigration powers in 2017, 2018 and 2019, with an analysis of outcomes for those claims raised in 2017 through to September 2020.

By analysing the longest period covered by the data, from 2017 through to September 2020, analysts are able to illustrate the full picture of claims raised from start to finish, as most have been conclusively decided by the 2020 end point.

Around 80% of all of these claims raised in 2017 were eventually refused, with 5% still awaiting a decision and around 10% being found to have some merit.

The Home Office can only detain an individual for removal where there is a realistic prospect of removal within a reasonable timescale. Even if a claim is eventually rejected it must be carefully considered, which takes time. As a result, last-minute claims can significantly delay an individual’s removal and see that individual released from detention. This can lead to a person “timing out” their removal as the government’s 6-month window to return them under the Dublin regulation expired, or because the time spent in the UK is used as evidence to argue their case to remain.

While every case that is raised is assessed and decided upon its individual merits and given the due consideration such important claims demand, these figures reveal a system open to abuse and are clear evidence of the need for reform.

The government is committed to delivering a system that is not so easy to abuse and where genuine claims are identified and supported sooner.

The government has today (16 March) announced the appointment of Liz Barclay as Small Business Commissioner to spearhead the national effort to crackdown on delayed invoices – which cause thousands of small businesses to close every year.

Liz Barclay will be the first female Small Business Commissioner, a post which was created in 2016 to help small businesses secure the payments owed to them and to galvanise UK businesses behind a new culture of prompt payment.

Over £23.4 billion is owed in outstanding invoices to UK businesses. Some businesses wait several months before paying their suppliers, severely impacting the bottom line of many small businesses.

Small businesses account for two-thirds of UK private sector employment and more than half of business turnover. Late payments damage their income, which can hold back investment or job creation and, in the worst cases, lead to job losses and business closures.

Action to help businesses and stop this damaging practice will remain a key priority as the government looks to support small businesses and build back better from the pandemic.

Liz Barclay said:

We need a real culture change around business payments in the UK to take pressure off our phenomenal entrepreneurs. People who have already delivered goods and services have to be able to turn their attention to their next client and next order rather than chasing up late payments and worrying about their cashflow. I know from personal experience how damaging that can be to mental and emotional health.

By working with businesses and ensuring their concerns are listened to I hope to be able to deliver a payment regime that keeps cash flowing and works for everyone.

Small Business Minister Paul Scully said:

Having run small businesses for most of my professional life I know just how toxic delayed invoices can be, causing needless uncertainty as business owners chase payments which should have been made weeks or even months ago.

I thank Phillip King for his work tackling this issue as interim Small Business Commissioner and I welcome Liz Barclay to this hugely important role, driving the positive change we need to see and standing up for our hard-working small businesses.

Ms Barclay’s appointment is the latest in a suite of actions which the government has taken to address the issue of late payments.

Last year, the government consulted on new powers for the Commissioner, including the power to order payments, levy fines and open investigations based on third-party information. The responses to the consultation and further proposals will be published in due course.

In January this year, the government also announced reforms to the Prompt Payment Code, a voluntary scheme whereby businesses commit to paying their partners in good time, driving further culture change and encouraging businesses to address their practices.

The government is committed to backing the UK’s small businesses and has provided unprecedented support throughout the pandemic. Further support announced in the Budget earlier this month includes:

• £5 billion for new Restart Grants – a one off cash grant of up to £18,000 for hospitality, accommodation, leisure, personal care and gym businesses in England
• a new UK-wide Recovery Loan Scheme to make available loans between £25,001 and £10 million, and asset and invoice finance between £1,000 and £10 million, to help businesses of all sizes through the next stage of recovery
• a new Help to Grow scheme to offer up to 130,000 companies across the UK a digital and management boost

About Liz Barclay

Liz Barclay is a small business and consumer affairs broadcaster, producer and writer. She started her career as an adviser and then CEO with Citizens Advice before moving into radio and TV production and presentation specialising in business and consumer affairs. She is Financial Inclusion Commissioner; Chair of the BSI Consumer Forum and the Fair by Design Campaign; a non-executive Director of 2 organisations and a member of the Standards Boards of the Fundraising Regulator and The Equity Release Council. She is also an Ambassador for the Money Advice Trust and Business Debtline.

Liz works with Boards and small businesses on improving governance, trust and culture, diversity, and understanding customer behaviour. She coaches communication and presentation skills, chairs national and international conferences and has written several books on business.

Notes to editors

• Liz Barclay’s term as Small Business Commissioner will begin on 1 July when she replaces current interim Commissioner Philip King
• according to 2016 research from the Federation of Small Businesses (FSB), around 50,000 businesses close every year due to late payments