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Tax - Free Childcare

Tax-Free Childcare

Tax-Free Childcare is a government scheme to help with the cost of childcare. Parents can open an online childcare account which they 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 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 government 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 is eligible?

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

  •     Earn around £140 a week and not more than £100,000 each per year.
  •     Do not receive childcare vouchers, tax credits or Universal Credit.
  •     Have a child who is 11 or under (or 17 if your child has a disability) 

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 (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 
  •     find out what you need to do next