MORE than 20,500 families in Wales saved money on their childcare in December as HM Revenue and Customs (HMRC) urges families to sign up before booking their Easter holiday childcare.

Working families who sign up to Tax-Free Childcare can make yearly savings of £2,000 off their childcare costs for each of their children up to the age of 11 and £4,000 for disabled children up to the age of 16.

Visit GOV.UK to check eligibility and register for Tax-Free Childcare.

Myrtle Lloyd, HMRC’s Chief Customer Officer, said: “£2,000 a year off childcare bills can make a big difference to household expenses. There are plenty of childcare providers to choose from to suit your needs and your children’s interests.”

Once a Tax-Free Childcare account has been opened for each child, for every £8 deposited, the government tops it up by £2. A total of £46.6 million in government cash was added to accounts in December, the latest figures show, contributing to the cost of childcare for almost 660,000 children.

A family can save up to £500 every three months for each child (£1,000 every three months if the child is disabled) which can be used to pay for any approved childcare.

Parents can choose from thousands of providers now accepting Tax-Free Childcare as payment including wraparound care or childminders for term time care, or holiday clubs and workshops during the school holidays.

Once an account is open, parents can deposit money to use straight away or keep it in the account for whenever it’s needed. Any unused money in the account can be withdrawn at any time.  

Families could be eligible for Tax-Free Childcare if:  

• they have a child or children aged 11 or under. They stop being eligible on 1 September after their 11th birthday. If their child has a disability, they receive up to £4,000 a year to help with higher childcare costs that are often involved, until 1 September after their 16th birthday

• the parent and their partner (if they have one) earn, or expect to earn, at least the National Minimum Wage or Living Wage for 16 hours a week, on average  

• they each earn no more than £100,000 per annum  

• they do not receive Universal Credit or childcare vouchers

Tax-Free Childcare can be used alongside the free childcare hours, subject to eligibility.

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 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.  

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