Tax-Free Childcare offers Government-funded support with the costs of approved childcare to parents with children aged 11 or under living with them. For parents of disabled children, Tax-Free Childcare is available up to age 16. The support is available until 1 September following the child’s 11th birthday, or 16th birthday for disabled children.  

Eligible parents can pay into a Tax-Free Childcare account by debit card or bank transfer and for every £8 added to the account, the Government will add a further £2 to make £10 in the account in total. Parents are eligible for up to £2,000 of Government ‘top up’ every year, or £4,000 if their child is disabled.  

Funds held in the Tax-Free Childcare account can be used to pay approved childcare providers directly, with the only ongoing requirement for parents being that they confirm every three months that their circumstances haven’t changed.  

To qualify, parents must:  

• earn, or expect to earn, from employment or self-employment over the coming three months at least the National Minimum Wage/Living Wage for 16 hours per week on average – e.g. at least £1,976 for parents aged 23 or over 

• each have adjusted net income of less than £100,000 per year (broadly this is total income less specific deductions such as trading losses, Gift Aid donations and certain pension contributions)

Full details regarding eligibility can be found on GOV.UK. 

Approved childcare includes registered childminders, nurseries, nannies and breakfast- or after school-clubs as well as accredited holiday clubs and sports activities, which may provide parents with some welcome support over the Easter holidays. Approved providers can be found via specific links for England, Wales, Scotland and Northern Ireland at https://www.gov.uk/help-with-childcare-costs.  

Applying for Tax-Free Childcare will affect entitlement to tax credits, childcare vouchers and Universal Credit, so anyone in receipt of these will need to consider the impact of claiming. Further details can be found on the Childcare Choices website.  

 

  This article reflects the position at the date of publication (21 February 2023). If you are reading this at a later date you are advised to check that that position has not changed in the time since.    

 

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