Latest news with #Tax-Free
Daily Record
09-07-2025
- Business
- Daily Record
Martin Lewis urges nearly one million families to claim childcare boost worth up to £2,000
The consumer champion is urging working parents not to miss out on childcare help this summer. How to apply for Tax-Free Childcare and 30 hours childcare Martin Lewis is urging 800,000 families not to miss out on financial help to cover the cost of childcare this summer. Co-presenting Good Morning Britain (GMB) on ITV with Susanna Reid on Wednesday, the consumer champion explained how the UK Government' 'Tax-Free Childcare Scheme' can be used to pay for nursery fees, childcare, childminders, summer holiday camps and breakfast clubs. The financial guru explained to viewers that thousands of people are missing out due to the name - Tax-Free Childcare Scheme - as it's confusing and not a true representation of the support on offer. He said: 'It isn't tax-free and it isn't about tax so it's completely mis-named and totally confusing and that puts many people off.' He added that he is currently campaigning to rename it the 'Working Family Childcare Top-Up' to encourage more people to take advantage of the benefits it offers. Martin explained how the scheme can be used to help pay for clubs during the school summer holidays only, it is flexible and can be used to fit in with individual childcare needs. He also simplified how the scheme works in an effort to help more people understand how it works. He said: 'You put money into the Tax-Free Childcare account and for every 80 pence you put in, the state (UK Government) adds 20 pence, up to a maximum of £500 free per quarter, so £2,000 for a year which you can then use to pay on childcare.' Martin previously explained in the MoneySavingExpert newsletter that this can be used to pay for childcare with registered providers. This means: In Scotland: Care Inspectorate registered In England and Wales: Ofsted registered, which includes the Early Years Register & the Childcare Register In Northern Ireland: Registered with the local Health and Social Care Trust Martin also explained the eligibility criteria: Child must be aged 11 or under, unless they have a disability in which case it rises to 16 or under Parents need to earn the equivalent of at least 16 hours per week on the National Minimum Wage No parent can earn over £100,000 per year However, Martin had a caveat for people on Universal Credit. He explained: 'If you're on Universal Credit, you're far better off claiming your childcare costs through the Universal Credit system as claiming this (Tax-Free Childcare) would actually stop your Universal Credit.' Martin added: 'This is just a signpost, 825,000 of the 1.25 million eligible families aren't claiming so the key is, if you pay for childcare, check out 'Tax-Free Childcare'.' Tax-Free Childcare in a nutshell The latest figures from HM Revenue and Customs (HMRC) show that nearly 826,000 working families saved up to £2,000 per child through the Tax-Free Childcare scheme during the 2024/25 tax year. The data also indicates that in March 2025, 36,095 families in Scotland used the scheme to save on their annual childcare bills. 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. 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 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 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 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.
Daily Record
03-07-2025
- Business
- Daily Record
Parents urged to claim tax-free top-up to help with childcare costs over summer holidays
HMRC's tax-free scheme can help parents pay for childcare costs over the school holidays. 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) figures also show that in March 2025, 36,095 families in Scotland used the scheme to save on their annual childcare bills, an increase of 4,925 families compared to the previous March. 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 to start saving today.' Andrew Bartlett, chief executive of Advice Direct Scotland, said: 'It is good news that more families are making use of this support, which can provide real help at a time when household budgets are stretched by the cost-of-living and energy crisis. But many parents are still missing out, often because they are unsure how the scheme works or whether they qualify. 'With schools breaking up, it's vital that families check their eligibility and sign up so they can get the help they need to cover childcare costs over the summer. 'Our free, impartial service at is here to help anyone who is worried or confused about Tax-Free Childcare or any other tax matter. People can visit or call 0800 756 3381 for support.' Tax-Free Childcare in a nutshell 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 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.
IOL News
10-06-2025
- Business
- IOL News
How to maximise your tax-free savings account for long-term wealth
Discover how to effectively utilise your Tax-Free Savings Account (TFSA) to reduce your tax burden and enhance your long-term financial strategy. Image: Freepik Many South Africans are looking to reduce their tax burden and improve overall tax efficiency, and one of the most effective tools available is the Tax-Free Savings Account (TFSA). With an annual contribution limit of R36,000 and no tax on interest, dividends, or capital gains, the TFSA offers significant long-term benefits – although it's important to ensure that you align your TFSA with your broader investment strategy. Here's how to get the most from your tax-free savings. Use your tax-free allowance wisely: The TFSA has become a key component of long-term financial planning because all income and growth earned within the structure, including interest, dividends, and capital gains, are tax-free. Note, however, that contributions are made with after-tax income, and no tax deduction is available on contributions such as in the case of retirement fund contributions. While it, therefore, makes sense to first maximise your retirement fund contributions, the TFSA remains an exceptional long-term investment vehicle. Think long-term from the start: The tax benefit in the early years of a TFSA is fairly small, with the compounding tax savings only becoming meaningful after about a decade. With this in mind, a TFSA is best suited to long-term investing and is not ideal for an emergency fund. It can, however, be used to supplement retirement savings or to meet other long-term goals, such as funding a child's tertiary education. Structure your contributions to suit your cash flow: Legislation permits annual TFSA contributions of up to R36,000 with a lifetime limit of R500,000, with most providers allowing flexible contribution options for investors depending on their personal circumstances. For instance, if your income is variable, you can set up a modest debit order and top it up when additional income becomes available, thereby allowing you to consistently build wealth without placing strain on your budget. Understand the implications of withdrawals: While it is possible to withdraw from your TFSA at any time, it's important to understand the consequences because withdrawals can reduce your lifetime contribution capacity. For example, if you've contributed R300,000 towards your TFSA and withdraw R50,000, you may only contribute another R200,000 in the future, regardless of whether you replace the R50,000 later. Importantly, withdrawals not only reduce your tax-free limit but can also interrupt the compounding growth within the investment. Match your investment to your time horizon: When selecting the underlying investment for your TFSA, consider how long you intend to stay invested. If you're investing for your child's education 15 to 20 years from now, or to supplement retirement income, your investment horizon may be long enough to justify growth assets. Having said that, it's important to balance return expectations with your risk tolerance. Also, remember that individuals under 65 already enjoy a tax exemption of R23,800 per year on interest earned (R34,500 if over 65), so using your TFSA to invest in low-yielding interest-bearing assets might not be the most efficient use of your tax-free allowance. Choose an efficient investment platform: There are numerous TFSA providers in South Africa, ranging from banks to investment platforms. While fixed-term accounts and money market funds are available, those with a long investment horizon should consider a more aggressive unit trust portfolio to harness better growth over time. Ideally, select a platform that provides consolidated reporting across your retirement and discretionary investments, so that your TFSA integrates seamlessly into your overall strategy. Avoid over-contributions and penalties: It's important to ensure that you stay within your R36,000 annual limit, as any contributions above this will attract a penalty tax of 40% from Sars, regardless of your personal income tax bracket. If you have more than one TFSA, be sure to track contributions carefully to avoid exceeding the threshold and incurring avoidable penalties. Stay compliant with Sars: Even though no tax is payable within a TFSA, you are still required to disclose the investment on your tax return. Your provider will issue a tax certificate, and it's important to include all TFSA-related information when filing with Sars. Maintaining transparency ensures compliance and helps avoid any administrative issues. A TFSA can be a powerful tool for building long-term wealth, provided it is used strategically, managed consistently, and integrated into your broader financial plan. * Odendaal is an associate financial planner at Crue Invest. PERSONAL FINANCE
The Herald Scotland
09-06-2025
- Business
- The Herald Scotland
HMRC gives out £632m Tax-Free Childcare to families
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, 54,020 families in London used the scheme to save on their annual childcare bills, an increase of 8,100 families compared to the previous March. Parents! 👪 Could you be missing out on up to £2,000 a year to help with childcare costs? Find out what you're entitled to here. 👇 — HM Revenue & Customs (@HMRCgovuk) May 23, 2025 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, says: '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 to start saving today.' How does tax-free childcare work? For every £8 deposited in a Tax-Free Childcare account, the 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. Martin Lewis discussed it on his podcast last month, where he said: "Tax free childcare is where you can put money into an account held at and for every 80p you put in the state adds 20p on top, up to a maximum free money of £500 pounds coming from the state per quarter - with double for disabilities. And this is tax free childcare for children under the age of 11." Recommended reading 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 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 Each earn no more than £100,000 per annum Do not receive Universal Credit or childcare vouchers Visit to check eligibility and register for Tax-Free Childcare. Tax-Free Childcare can be used alongside the free childcare hours subject to eligibility.
Daily Record
06-06-2025
- Business
- Daily Record
Parents urged to claim £2,000 tax-free top-up to help with summer childcare costs
HMRC tax-free scheme can help parents pay for childcare costs over the school holidays. 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 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 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 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 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.
