HMRC issues new guidance for parents on child benefit and tax‑free childcare

HM Revenue & Customs (HMRC) has urged UK parents to enrol in the Tax‑Free Childcare scheme, which can save families almost £100 a month and provides up to £2,000 per year per child (or £4,000 for a disabled child). The scheme, unchanged since the previous government, allows a £2 government top‑up for every £8 deposited and can be used for nurseries, childminders, holiday clubs and after‑school care. Prime Minister Andy Burnham and Chancellor John Healey are overseeing the tax authority.

In a separate alert, HMRC warned that parents whose household income exceeds £60,000 may trigger the High‑Income Child Benefit Charge, requiring repayment of child benefit and rising to a full charge at £80,000. A new digital service lets eligible taxpayers settle the charge through their PAYE tax code rather than filing a Self‑Assessment return, provided they register by the January 31 deadline following the tax year.