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Tax - Free Childcare | Sandwell Council

Tax - Free Childcare

Tax-Free Childcare is a new Government scheme to help the cost of childcare. Parents will be able to open an online childcare account which you can pay into to cover the cost of childcare with a registered provider and the government will add to the account.

How does it work?

  • Parents will have an online account – just like a bank account – which they can use to pay childcare professionals.
  • For every 80p you or someone else pays in the governement will top up an extra 20p (this is equivalent of the tax most people pay -20%)
  • Parents could get a Government contribution of up to £2,000 per child, per year, or £4,000 for disabled children, to go towards their childcare costs.
  • Parents and others (grandparents, other family members etc) can pay money into the childcare account as and when they like giving you the flexibility to pay more in some months and less at other times. 
  • You’ll be able to withdraw money from the account if you want to.   If your circumstances change or you no longer want to pay into the account, then you’ll be able to withdraw the money you have built up. If you do, the government will
    withdraw its corresponding contribution.

Who's eligible?

Parents could be eligible for Tax-Free Childcare if they:

  •     Earn around £115 a week and not more than £100,000 each per year.
  •     Do not receive childcare vouchers, tax credits or Universal Credit.
  •     Have children who are under 9 or under as of 15 January 2018
  •     Have a disabled children who is under 17

The childcare scheme will be rolled out to all remaining eligible children up to 12 years in March 2018.

See the full eligibility criteria

Checking your eligibility and signing up (Childcare Choices)

You can now find out more and check your eligibility for Tax Free Childcare (TFC) (and all other government schemes) via the Childcare Choices website.

Childcare Choices allows you to:

  •     check your eligibility for each of the childcare schemes
  •     find out more about each scheme
  •     sign up for a scheme or register for email alerts (if not available yet)*
  •     find out what you need to do next

*If you are eligible for Tax Free Childcare, you can start depositing funds into your account to receive the government top up and arrange payments to your registered childcare providers.

The website allows you to select how much you earn, followed by whether or not you live with a partner. You will then be presented with your options highlighted in yellow (schemes you do not quality for will be greyed out). Under each available option you will see: “Is it for me?”. Selecting this will display further details and direct you to the relevant place such as online registration, calculators, email alerts, or GOV.UK pages.