Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether he has made an assessment of the potential merits of increasing the £500 cap on payments received every three months under the Tax-Free Childcare scheme in the context of increased childcare costs.

Tax-Free Childcare (TFC) provides financial support for working parents with their childcare costs. For every £8 parents pay into their childcare account, the Government adds £2 up to a maximum of £2,000 in top up per year for each child up to age 11 and up to £4,000 per disabled child until they’re 17. Take-up of Tax-Free Childcare has continued to increase and is on a steady upward trajectory: at the end of September 2022 (the most recent data) an estimated 401,000 families used Tax-Free Childcare for 478,000 children, compared to 391,000 families for 468,000 children in June 2022. The Government spent £44 million on TFC top-up for families in September 2022.

Additional childcare support is available: all three- and four-year-olds can access 15 hours of free childcare per week, regardless of circumstance. Eligible working parents of three- and four-year-olds can also access an additional 15 hours of free childcare per week, also known as 30 hours free childcare. Moreover, Universal Credit (UC) claimants are able to claim up to 85% of their childcare costs.