Skip to main content

Tax-Free Childcare scheme

The government's new Tax-Free Childcare scheme enables eligible working families to save 20% of their childcare costs. It is available for working parents with children under 12 (or under 17 for children with a disability).

Below is a list of our most frequently asked questions about the scheme. You can find additional information about Tax-Free Childcare on the website.

Who is eligible to use the scheme?

The scheme is available for working families where:

It can also be used by parents who are:

  • self-employed (newly self-employed parents will not have to earn the minimum income levels during their 'start-up' period)
  • 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.

Return to top

How much can I 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 £100 they save towards childcare costs.

Return to top

How can I register for the scheme?

You can apply for the scheme through the government's Childcare Choices website. Once you have open 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.

Return to top

If my circumstances change will I 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

Return to top

Will the new scheme replace childcare vouchers?

Parents will no longer be able to register for childcare vouchers after April 2018. However, if you are already using childcare vouchers you can choose to continue to use these instead of joining the new scheme.

Return to top

Would I 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 website it can give you an estimate of each scheme to help you make a comparison between them.

Return to top

Can my 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.