The government's tax free childcare scheme (GOV.UK) enables eligible working families to save on their childcare costs. It is available for working parents with children aged 0 to 11 (or 0 to 16 for children with a disability).
Children stop being eligible for the tax free childcare scheme on 1 September after their eleventh or sixteenth birthday.
Below is a list of our most frequently asked questions about the scheme. You can find additional information about Tax-Free Childcare on the Childcare Choices website.
- What you can use tax free childcare scheme for ?
- Who is eligible to use the scheme?
- How much can I save?
- How can I register for the scheme?
- If my circumstances change will I be able to withdraw the money from the account?
- Will the new scheme replace childcare vouchers?
- Would I be better off using Tax-Free Childcare instead of childcare vouchers?
- Can my childcare provider register for the scheme if they already accept childcare vouchers?
What you can use tax free childcare scheme for ?
You can use it to pay for approved childcare costs (GOV.UK, for example:
- childminders, nurseries and nannies
- after school clubs and play schemes
Your childcare provider must be signed up to the scheme before you can pay them and benefit from Tax-Free Childcare.
Check with your provider to see if they're signed up.
Who is eligible to use the scheme?
The scheme is available for families where:
- Parents work in the UK, this includes those who are self-employed.
- Each parent earns at least the National Minimum Wage or Living Wage (GOV.UK) for 16 hours a week and no more than £100,000 a year.
- Parent(s) aren't already receiving support through Working Tax Credit, Child Tax Credit (GOV.UK), Universal Credit or childcare vouchers
- Children are aged 0 to 11 (or 0 to 16 if disabled)
- For every £8 you pay into an online account, the government will add an extra £2, up to £2,000 per child per year
- Parents must have; a National Insurance number, British, Irish citizenship or settled or pre-settled status (GOV.UK) with permission to access public funds - your UK residence card will tell you if you cannot do this.
It can also be used by parents who are:
- on paid sick leave
- on paid or unpaid statutory maternity, paternity or adoption leave
If you're not working, you may still be eligible if your partner is working, and you get Incapacity Benefit, Severe Disablement Allowance, Carer's Allowance or Employment and Support Allowance.
How much can you save?
For every £8 you or someone else pays in to the account the government will add another £2 up to a maximum of £2,000 per child per year (or £4,000 for children with a disability). This means that families will receive an extra £20 for every £80 they save towards childcare costs, totalling £100.
You can get Tax-Free Childcare at the same time as 30 hours free childcare if you're eligible for both.
How can you register for the scheme?
You can apply for the scheme through the government's Childcare Choices website. You, and your partner, if you have one, will need your:
- National insurance number (s).
- Details of one or more of the following - your UK Passport, tax credits, P60 or a recent payslip.
In some cases, additional checks may be needed to confirm whether you're eligible. If you are found ineligible you will be told why.
Once you have opened your account it can be used to pay in money to use towards your childcare costs with a childcare provider who has also registered for the scheme. Grandparents, other family members and employers will also be able to pay into the account if they choose.
If your circumstances change will you be able to withdraw the money from the account?
If your circumstances change or you no longer want to pay into the account you will be able to withdraw the money you have saved. However, the government will withdraw its contribution towards your savings as you will no longer be eligible to receive it.
Will the new scheme replace childcare vouchers?
Parents will no longer be able to newly register for childcare vouchers after October 2018. However, if you are already using childcare vouchers you can choose to continue to use these instead of joining the new scheme.
Would you be better off using tax free Childcare instead of childcare vouchers?
This would depend on factors such as how much you earn, what your childcare costs are and the age of your children. However, if you use the childcare calculator on the gov.uk website it can give you an estimate of each scheme to help you make a comparison between them.
If parents decide to apply for tax free childcare and are successful parents cannot continue to claim childcare vouchers and must inform their employers within 90 days.
Parents cannot re-join their voucher scheme or their directly contracted childcare scheme.
Can your childcare provider register for the scheme if they already accept childcare vouchers?
While parents can't make payments using both tax free childcare and childcare vouchers, childcare providers who are signed up to Tax-Free Childcare are able to receive payments from both schemes.