Question to the HM Treasury:

To ask Her Majesty’s Government, for each financial year from 2015–16 to 2020–21, what are the estimated annual costs of providing tax relief for (1) tax-free child credit, and (2) child trust funds.

Tax-Free Childcare (TFC) will be launched in early 2017, and will give up to 1.8m families 20 per cent support towards their childcare costs, up to a maximum government contribution of £2,000 per child, per year (£4,000 per child, per year, for disabled children).

The estimated total costs of TFC in each year are:

These costs are expected to rise to around £1 billion per year in steady state.

Child Trust Funds (CTF) are long-term tax-free savings accounts for children. Since 2011, children without a CTF can open a Junior ISA instead. Existing CTF accounts can still receive contributions. The contribution limit per CTF for the 2015-16 tax year is £4,080.

The cost to the government of exempting CTF account savings from income tax is set out in HM Revenue and Customs’ “Estimated cost of minor tax allowances and reliefs” and is negligible in 2013-14 and 2014-15. The cost is also expected to be negligible in 2015‑16 to 2020–21.