HMRC issues Halloween reminder that could provide an extra £4,000

HM Revenue and Customs (HMRC) has issued a reminder for families that could get up to an extra £4,000 a year for their child.

By opening a Tax-free Childcare account, parents can help subsidise childcare costs for school, holiday clubs, breakfast, after-school clubs, childminders, or nurseries. Working families can get up to £2,000 a year per child off their childcare bills for children up to the age of 11 and £4,000 a year up to the age of 16 if the child has a disability.

Meanwhile, every £8 paid into an account will automatically result in a £2 top-up from the government. HMRC claims families could save up to £500 every three months for each child or £1,000 if the child has a disability.

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Myrtle Lloyd, HMRC’s Director General for Customer Services, said: "Families need plenty of childcare options when the weather turns cold and wet and days get shorter. We would urge parents to ensure they’re taking advantage of all opportunities available – whether it’s sending their child to wraparound school club or a holiday club during the half term break.

"Tax-Free Childcare provides financial help that fits your family - to support your childcare needs and save you money. Search ‘Tax-Free Childcare’ on GOV.UK to get started."

HMRC said it only takes 20 minutes for families to open up an account, with deposits being available at any time. Money from the account can be used immediately or left in the account for when it's needed.

Meanwhile, any unused cash from the account can be withdrawn at any time.