The data from HMRC reveals as of June, 53 per cent of families with Tax-Free childcare (TFC) accounts were using them.
A breakdown of the figures shows for the same month, 391,210 families had a TFC account and were taking up the 30 hours, but just 186,625 were using it. There were 260,350 families with just a TFC account and 204,820 were using it.
Around 1.3 million families are thought to be eligible for TFC, which allows working parents to claim back £2,000 a year on childcare costs. Last year, data from the Treasury revealed a £2.4bn underspend on the scheme.
Reasons HMRC gives for families opening accounts and not using them include parents changing their minds about using the scheme and/or an account being opened for them when they apply for the 30 hours of funded childcare.
However, the National Day Nurseries Association (NDNA) has argued that the system is ‘too complex’ and ‘many families aren’t aware of what they are entitled to.’
Historically, the Tax-Free Childcare system has been plagued with technical glitches on and off since its launch in April 2017.
The figures also show:
- As of June, 3,700 families with disabled children had a TFC account.
- Families with children up to the age of four are more likely to be using the scheme than those with older children.
- The numbers of families using TFC has continued to grow since it was launched in 2017.
- In 2021-22, a total of 815,855 families had a TFC account.
- Take-up of the scheme is the lowest in Northern Ireland
NDNA’s chief executive Purnima Tanuku has urged the Government to use the ‘massive’ underspends from Tax-Free Childcare to support children and the childcare sector.
She said, ‘NDNA has suggested a more simplified approach to the Department for Education of putting all forms of childcare support into one online account for each child. This would be easier for families and providers, increasing uptake while reducing the administrative burden of the current systems.’
A HMRC spokesperson said, 'More and more families are benefitting from Tax-Free Childcare, with the number of parents being helped through the scheme increasing by over a quarter in the last year.
'We're continuing to raise awareness of Tax-Free Childcare and help families access the support they are entitled to.'
