Author Gina Christodoulou
You could save up to £2,000 a year per child by using the Government’s Tax Free Childcare scheme when paying for approved childcare.
The scheme will see HMRC contribute £2.00 for every £8.00 of childcare paid for by a parent into the scheme up to the value of £10,000 per child per year. You can get Tax-Free Childcare at the same time as 30 hours free childcare if you’re eligible for both.
It is important to note that paying for childcare is not a valid business expense and your contribution toward the Tax Free Childcare scheme would need to be made by you/your partner in your personal capacity.
What you can use Tax-Free Childcare for
You can use it to pay for approved childcare, 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. You will need to check with your provider to see if they’re signed up.
Eligibility
Your eligibility depends on:
- if you are working
This includes being in work, on sick leave or annual leave or on shared parental, maternity, paternity or adoption leave - your income (and your partner’s income, if you have one)
You’ll need to expect to earn a certain amount over the next 3 months. This is at least the National Minimum Wage or Living Wage for 16 hours a week on average.For example, over the next 3 months you expect to earn at least £1,813.76 – the National Living Wage for people over 25. - your child’s age and circumstances
Your child must be 11 or under and usually live with you. They stop being eligible on 1 September after their 11th birthday. Adopted children are eligible, but foster children are not.If your child is disabled you may get up to £4,000 a year until they’re 17. - your immigration status
You will not be eligible if you’re from outside the EEA and your UK residence card says you cannot access public funds.
See further guidance on eligibility on HMRC’s website.
Apply
Apply online for Tax-Free Childcare
Please note, you cannot receive the Tax Free Childcare along any other child benefit so if you are receiving child tax credits or childcare vouchers you will need to forfeit these.