Parents urged to claim £2,000 tax-free top-up to help with summer childcare costs
How to apply for Tax-Free Childcare and 30 hours childcare
Nearly 826,000 working families saved up to £2,000 per child with Tax-Free Childcare in the 2024 to 2025 tax year. The money helps families pay for their childcare, as part of the UK Government's Plan for Change to put more money in people's pockets.
HM Revenue and Customs (HMRC) is encouraging those yet to sign up for Tax-Free Childcare, to do it now and give their summer plans a financial boost.
Latest figures from HMRC show in March 2025, 579,560 families in the UK used the scheme to save on their annual childcare bills, an increase of 81,770 families compared to the previous March.
Working families who sign up to Tax-Free Childcare can boost their annual budget by up to £2,000 per child up to the age of 11 or up to £4,000 up to the age of 16 for a disabled child.
Parents can use the scheme to help towards the cost of approved childcare whether that's nursery for younger children, or for older children - wraparound or after school care clubs during term time or holiday clubs for the long summer holidays ahead.
Myrtle Lloyd, HMRC's Director General for Customer Services, said: 'Summer can be an expensive time if you have children. Whatever you're planning, Tax-Free Childcare can give your plans a welcome financial boost. Go to GOV.UK to start saving today.'
For every £8 deposited in a Tax-Free Childcare account, the UK Government tops it by £2, which means parents can receive up to £500 (or £1,000 if their child is disabled) every three months towards paying for their childcare costs.
Once families have opened a Tax-Free Childcare account, they can deposit money and use it straight away or keep it in the account to use it whenever it's needed. Any unused money in the account can be withdrawn at any time.
HMRC said it takes just 20 minutes to apply online for a Tax-Free Childcare account.
Once an account is opened, parents can deposit money and use it straight away or keep it in the account to use it whenever it's needed. Any unused money in the account can be withdrawn at any time.
Eligibility for Tax-Free Childcare
Families could be eligible for Tax-Free Childcare if they:
Have a child or children aged 11 or under. They stop being eligible on September 1 after their 11th birthday. If their child has a disability, they may get up to £4,000 a year until September 1 after their 16th birthday
Earn, or expect to earn, at least the National Minimum Wage or Living Wage for 16 hours a week, on average
Each earn no more than £100,000 per annum
Do not receive Universal Credit or childcare vouchers
A full list of the eligibility criteria is available on GOV.UK here.
Financial support for parents in Scotland
Social Security Scotland delivers five family payments which can help pay for extra school term expenses alongside everyday family costs like food, clothing and days out.
Scottish Child Payment is a weekly payment of £27.15 for eligible families with children up to the age of 16 - the payment is worth £108.60 every month and is only available north of the border.
Combined with Child Benefit payments from HMRC, parents could be due up to £212.20 each month in additional support. Child Benefit is a separate UK-wide payment worth £26.05 for the eldest or only child and is also paid every four weeks, amounting to £104.20.
The three Best Start Grant payments and Best Start Foods, also part of social security support, are designed to help families at key stages in their children's early years, including during pregnancy.
There is no cap on the number of children in one family who can receive these payments.
One-off payments for families
Best Start Grant Pregnancy and Baby Payment - one-off payment of up to £767.50 available after 24 weeks of pregnancy until a baby turns 6 months.
Best Start Grant Early Learning Payment - one-off payment of £319.80 to help with the costs of early learning when a child is between two, and three years and six months.
Best Start Grant School Age Payment - one-off payment of £319.80 to help with the costs of starting school available between June 1 and the last day in February in the year when a child is first old enough to start primary one.
Best Start Foods - up to £43.20 every four weeks from pregnancy up to when a child turns three to help buy healthy food, milk and first infant formula.
Scottish Child Payment
Scottish Child Payment helps towards the costs of supporting your family and is a weekly payment of £27.15 that you can get for every child you look after who is under the age of 16. Payments are made every four weeks and worth £108.60 per child.
Parents, carers and guardians can get more information on the dedicated Children and Family section on mygov.scot here or by calling Social Security Scotland free on 0800 182 2222.
Families can learn more about the childcare offers available to them and what could fit their family by visiting Childcare Choices on GOV.UK here.
Families in Scotland may be able to access help during the ongoing cost of living crisis through the Cost of Living Support Scotland website here.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
.jpeg%3Fwidth%3D1200%26auto%3Dwebp%26quality%3D75%26crop%3D3%3A2%2Csmart%26trim%3D&w=3840&q=100)
Scotsman
2 hours ago
- Scotsman
Tax self assessment: make payment on account before deadline
Paying early can ease your cash flow, cut January stress, and help you avoid HMRC charges 💡 Sign up to the weekly Cost Of Living newsletter. Saving tips, deals and money hacks. Sign up Thank you for signing up! Did you know with a Digital Subscription to The Scotsman, you can get unlimited access to the website including our premium content, as well as benefiting from fewer ads, loyalty rewards and much more. Learn More Sorry, there seem to be some issues. Please try again later. Submitting... The second payment on account deadline for Self Assessment is July 31 It's an advance payment towards your next tax bill, helping to spread the cost Making the payment on time can ease cash flow and reduce January stress Late payments may incur interest and penalties from HMRC You can request to reduce your payment if you expect lower income this year If you're self-employed or file a Self Assessment tax return, you may be familiar with the term 'payment on account'. With the second instalment deadline falling this week (Thursday, July 31), it's important to understand how this system works — and how making your payment on time could benefit your financial planning and reduce stress when your tax bill is due in full. Advertisement Hide Ad Advertisement Hide Ad A payment on account is an advance payment towards your next Self Assessment tax bill. It's designed to help spread the cost of your tax over the year rather than paying a lump sum in January. (Photo: Pexels) | Pexels You make two payments on account every year: the first by January 31, and the second by July 31. Each payment is usually equal to 50% of your previous year's tax bill (excluding student loan repayments and Capital Gains Tax). For example, if your last tax bill was £4,000, you'll likely be asked to make two £2,000 payments on account for the current tax year. HMRC automatically sets up payments on account if your tax bill is more than £1,000 and less than 80% of your tax was collected at source (e.g. through PAYE). Advertisement Hide Ad Advertisement Hide Ad This often applies to freelancers, sole traders, and other self-employed individuals whose tax isn't deducted automatically from their income. If your earnings remain relatively stable, these advance payments can be helpful. But if your income drops from one year to the next, your payments may end up being too high — though you can request to reduce them in that case (more on that later). The benefits of making a payment on account While it may feel counterintuitive to pay tax before you've received the income, there are several benefits to staying on top of your 31 July deadline: Advertisement Hide Ad Advertisement Hide Ad Avoid a big January bill: January can be a tough month financially, especially after the Christmas period. Making your second payment on account in July spreads the tax burden across the year, helping you avoid one large, potentially overwhelming bill at the start of the year. Stay on HMRC's good side: Missing the 31 July payment deadline could lead to interest charges and penalties. Making the payment on time helps you avoid unnecessary costs and keeps your tax affairs in good order. Better cash flow management: If you build your payment on account into your budget throughout the year, it becomes a manageable part of your finances. It also helps you avoid relying on loans or credit cards to pay your tax bill in January. Reduces the impact of the final balancing payment: In January, you may owe a balancing payment — the difference between your total tax bill and what you've already paid on account. If you've made both payments on time and your income hasn't increased significantly, this final amount may be small or even nil. Advertisement Hide Ad Advertisement Hide Ad Protects you against HMRC penalties and interest: HMRC charges interest on late payments and may issue penalties for overdue tax. Making the July payment helps ensure you're not hit with unexpected charges down the line. How to make a payment on account Paying HMRC is relatively straightforward. You can make your July 31 payment in several ways: Online banking or mobile app: Use HMRC's bank details and your 11-character payment reference (your Unique Taxpayer Reference followed by 'K'). Use HMRC's bank details and your 11-character payment reference (your Unique Taxpayer Reference followed by 'K'). Debit or corporate credit card: You can pay online via HMRC's payment portal, although credit cards may incur a fee. You can pay online via HMRC's payment portal, although credit cards may incur a fee. Direct Debit: If you've set up a Direct Debit previously, HMRC may collect the payment automatically. If not, you can set it up in your HMRC online account. If you've set up a Direct Debit previously, HMRC may collect the payment automatically. If not, you can set it up in your HMRC online account. Bank Transfer (Faster Payments, BACS, CHAPS): Use your banking app or service to transfer funds directly to HMRC. Use your banking app or service to transfer funds directly to HMRC. At your bank or building society: You'll need a payslip from HMRC to pay this way — and this option is only available if you still receive paper statements. Always check your HMRC online account to confirm the exact amount due and your payment reference. What if you expect your income to be lower? If you believe your income will be significantly lower in the current tax year, you can apply to reduce your payments on account. This can be done online via your Self Assessment account or by submitting form SA303. Advertisement Hide Ad Advertisement Hide Ad But be cautious: if you reduce the payments too much and end up owing more, HMRC may charge you interest on the underpaid amount.
The Guardian
2 hours ago
- The Guardian
Despite $22bn promise, Adani has paid zero corporate tax in Australia and experts think it won't ever pay a cent
More than three years after Adani started extracting coal from its Queensland mine, the Indian conglomerate has paid zero corporate tax from its Australian project – and tax experts say it may 'never pay a cent'. Adani pledged just over a decade ago to plough $22bn in taxes and royalties into the Australian economy. Industry groups supporting the coal company had also claimed Adani's controversial plans would fund schools, hospitals and other infrastructure for 'almost a century'. Guardian Australia analysis also found that the Abbot Point port, operated by an Adani entity under a 99-year lease signed in 2011, rarely pays tax. Over a 10-year period, it paid company tax on port income on just one occasion, of less than $4m. Adani's Carmichael mine, and rail and port operations, are among the most politically divisive projects in Australia. While critics usually raise environmental concerns, there's also a question over its economic benefits for Australia. Despite recording strong revenue, Adani's Australian assets regularly report annual losses, in large part due to large annual payments to related parties for interest and lease expenses. It also pays for services conducted by other Adani entities as the coal moves through the logistics chain from mine to export. Sign up: AU Breaking News email Jason Ward, the principal analyst at the Centre for International Corporate Tax Accountability and Research, says the level of related-party transactions at Adani's Australian operations is 'pretty unprecedented'. 'My judgment on this is that this company is absolutely set up to never make taxable profit,' Ward says. 'The related-party transactions are so big and wild and all over the map that this company will never make a profit on paper and will never pay a cent of tax.' Adani's most recent accounts for the Carmichael coal operations, for the year ended 31 March 2025, record $1.27bn in revenue. This gets dialled down to a $461.7m loss after various expenses, resulting in no tax payable. Details of the 2024-25 accounts were first published by the Australian Financial Review. Adani Mining's immediate parent company is in Singapore, which has a low corporate tax rate. Its ultimate parent is the India-based Adani Enterprises. Ward says similar structures are used at other multinationals, and there is no suggestion Adani has acted illegally. But he says governments rarely hold companies to account for promises of how their operations will benefit the public purse. 'In the future, approvals should be on the basis of fulfilling promises made, with clawback mechanisms that can be put into contracts,' Ward says. Adani's Australian mining business is branded Bravus Mining and Resources. A spokesperson for Bravus says the company complies with the corporate tax system, which he said was designed so corporations pay tax on profits made after deducting operating costs, interest expenses, previous years' tax losses and other allowable deductions such as depreciation on capital investment. 'Corporate income tax is just one part of Australia's complex taxation system, and it is misleading to focus solely on corporate tax paid and ignore the contribution to the Queensland and Australian economies of the millions of dollars in combined GST, payroll tax, superannuation, royalties and more we paid in FY25,' the spokesperson said. 'Our operations make a significant ongoing economic and social contribution to both the people who do the work and earn the money, and to the prosperity of their home towns in regional Queensland where they spend their wage.' The accounts show Adani Mining paid a $78.6m royalty during the last 12-month reporting period. Royalties are payments made to governments to extract state-owned minerals. It also paid a $36m royalty to a related party. Guardian Australia analysis of company accounts and disclosures from the Australian Taxation Office (ATO) found the mining project has not paid corporate tax since opening in 2021. Adani's accounts show that even though revenue has been rising from the Carmichael operations, it has enough interest on related-party loans and other expenses to keep reporting losses. ATO disclosures for the Abbot Point terminal business, now named North Queensland Export Terminal Holdings, between 2013 and 2023 showed just one record of the Adani entity paying tax, which was for $4m in 2017-18. The port regularly generates annual income of between $300m and $550m. Tim Buckley, a former investment banker and the director of Climate Energy Finance, says that given Adani has not paid tax during recent periods of surging coal prices, it probably never will. 'If not now, when?' Buckley says. 'Adani has an extremely complex, opaque corporate structure in Australia. I'm comfortable saying they never will pay tax, given the state of the balance sheet.' In 2014, the then head of Adani Mining, Jeyakumar Janakaraj, said the Australian operations would deliver $22bn in taxes and royalties to be invested 'right back into frontline services'. Adani's contested coal proposal was supported by various representative bodies, including the Australian Resources and Energy Employer Association which said in 2017 the project would 'provide taxation and royalties that will fund schools, hospitals and other community infrastructure for almost a century'. The Minerals Council of Australia said in 2018 that 'through mining taxes and royalties, the Carmichael mine will generate billions of dollars for taxpayers over decades to fund nurses, teachers, police, hospitals, roads and other services and infrastructure for Queensland families and communities'.
Daily Mail
3 hours ago
- Daily Mail
Loophole that lets you gift without worrying about inheritance tax
I am one of the people that will be adversely affected by Rachel Reeves' unwarranted raid on unused pension pots. Currently, this change will mean an additional inheritance tax charge of about £270,000 for me, if I died. I have been looking at the gifting rules and the sums you can give away are measly, £3,000 each year, or unlimited £250 gifts but only one per person. Harvey Dorset, of This is Money, replies: Recent changes mean that considerably more people are in line to incur inheritance tax bills on their estates in the years to come. Pensions are set to fall into the inheritance tax net from 2027, meaning that many will find their estate is worth well above the inheritance tax allowance. Inheritance tax receipts recently increased to £8.2billion from April 2024 to March 2025, more than £800million higher than the same period a year before. One of the main ways to go about reducing a potential IHT bill is to make the most of gifting allowances to lower the value of your estate. However, the current gifting allowances have been in place since the mid 1980s, with a maximum total annual inheritance tax-free gift limit of £3,000. This has made it all the harder to meaningfully reduce the size of an estate by using this allowance. The rules state: 'On top of the £3,000 annual allowance, the rules stipulate that you can give as many £250 gifts to whomever you like, but this won't be immediately exempt if the recipient received the annual gifting allowance or part of it.' This is where your novel solution comes in. If you can find 400 willing participants – something I dare say you might have trouble with – why can't you give them each £250 to then gift to your two daughters? Unfortunately, as David Denton, tax expert at Quilter Cheviot, discusses below, you might not have found the genius solution that you might think. Luckily though, there are other options that might be available to help you pass your wealth to your two daughters. David Denton, tax expert at Quilter Cheviot, replies: As the tax burden hits a recent high and rumours swirl of more tax rises to come, it is understandable that consumers may wish to find ways to reduce their tax bill. However, the tax authorities are rightly switched on to the potential for abuse of the system and people finding what they think to be new and novel ways to avoid tax. Some may be legitimate but for the vast majority they are likely to cause more problems than it is worth. The UK introduced the 'General Anti–Abuse Rule' (GAAR) in 2013 and this is designed to target those taxpayers who avoid paying tax in ways that are not in the spirit of the rules, despite some aspects being potentially legal. Abusive arrangements can include as a series of pre–ordained steps, where HMRC would look at the overall effect of the series or combination of transactions in order to identify the real purpose. The GAAR applies to a number of personal taxes, including inheritance tax, so if enough tax was at risk, it could come into effect here given there is a pre–planned element and involves a number of people. Instead you should be looking at how they can use the rules to still make substantial gifts. For example, should you expect to live for another seven years then it may be worth making a gift above the £3,000 limit as a potentially exempt transfer. After seven years of being gifted these assets will no longer be taken into account on death and be free from inheritance tax. There are other possibilities for exempt gifts, such as marriage gifts, which can be up to £5000, according to the relationship between the donor and recipient. Finally there is also the option of making gifts out of surplus income, where the gift is part of your normal expenditure and leaves you able to maintain your usual standard of living. These gifts can come from salary, dividends, pension income or rental income, so it does give you some options that are very much within the rules of the UK tax system.
