Data reveals parents ‘Failing to make use of Tax-free childcare’

Published on 10th June 2019

According to the government, its Tax-Free Childcare (TFC) scheme ‘has not had the uptake expected’, with only 22% of eligible families making use of it.

While the government budgeted for 415,000 families to be using the TFC scheme by October 2017, data reveals that, by December 2018, only 91,000 families were.

The TFC initiative, which replaced the Employer Supported Childcare (ESC) scheme, is available to employed and self-employed individuals and is paid per child, allowing single parents to benefit.

Tax relief of up to 20% is available for childcare costs, up to a total of £10,000. The scheme is therefore worth a maximum of £2,000 per child (£4,000 for a disabled child). Children up to the age of 12 and disabled children up to the age of 17 are eligible.

The government suggests that technical difficulties with the Childcare Choices website may have contributed to the low uptake of the scheme.

Julia Waltham, Head of Policy and Campaigns at non-profit organisation Working Families, said: ‘The reason for the low take-up of TFC could be because parents have chosen to stick with ESC vouchers and we know from our own research that working parents are increasingly reliant on informal childcare support from family, often grandparents.’

The Childcare Choices website can be accessed at www.childcarechoices.gov.uk.