Childcare benefit worth up to £2,000 not being claimed by hundreds of thousands

Nearly one million famillies are at risk of missing out on tax-free childcare this Christmas period. It is believed around 800,000 famillies are eligible for the benefit but are not claiming it.

The scheme essentially operates to allow parents to not pay tax on earnings they would use to pay for childcare. While generally you would pay £20 out of £100 in taxes, the scheme instead sees the government topping the claimant up by £20.

The money intended for childcare can then be used to pay for childcare providers and after-school clubs. You will only receive the top-up once you pay-in for the childcare. Therefore, to receive the maximum of £500 or £1,000 for a disabled child, you will need to pay £2,000 for every three months.

According to the government, a person's eligibility for Tax-Free Childcare will depend on their employment status, income, immigration status, and the child's age and circumstances.

Parents who are in some form of work, even if just one parent is working and the other is unemployed, can receive Tax-Free Childcare if they meet one of the following:

Parents can still receive Tax-Free Childcare if their partner is either working or receive one of the following benefits:

Applications can be made for this group if they're either starting or re-starting work within 31 days of the application.

Following an application, parents must report that they expect to earn the following over the next three months:

This is calculated based on the current National Minimum Wage or Living Wage for 16 hours a week on average. Because of this, claimants can use an average of their expected earning if they do not receive a regular income or are self-employed.

Those self-employed who have only started a business less than 12