Tax-Free Childcare

What is Tax-Free Childcare

Tax-Free Childcare is a savings account scheme which offers working families 20% support towards qualifying (approved) childcare costs. It is an alternative to the Employer Supported Childcare Scheme, sometimes also known as the Childcare Voucher Scheme.

The scheme is available for children up to the age of 12. It is also available for children with disabilities up to the age of 17, as their childcare costs can stay high throughout their teenage years.

To qualify, parents will have to be in work, and each earning around £115 a week and not more than £100,000 each per year. Tax-Free Childcare doesn’t rely on employers offering the scheme, unlike the current scheme Employer-Supported Childcare. Any working family can use Tax-Free Childcare (including self-employed), provided they meet the eligibility requirements.

Benefits of Tax-Free Childcare

For every 80p you (or someone else) pays into your child’s childcare savings account, the government will top up an extra 20p. This is equivalent of the tax most people pay - 20% - which gives the scheme its name, ‘tax-free’.

The government will top up the account with 20% of childcare costs up to a total of £10,000 - the equivalent of up to £2,000 support per child per year (or £4,000 for disabled children).

How to apply

You’ll be able to open an online account, which you can pay into for covering the cost of childcare with a registered provider. You will also be able to check whether you are eligible for additional free hours of early years education for 3 and 4 year olds (30 hours childcare).

Further information

Tax-Free Childcare - 10 things parents should know

Who can apply for Tax-Free Childcare

How to apply for 30 Hours and Tax-Free Childcare (diagram)

Apply for Tax-Free Childcare (process)

Childcare Choices

Problems accessing your childcare account?
Information from Gov.UK

Childcare savings calculator

Not sure whether to stay with your Employer Supported Childcare or change to Tax-Free Childcare? The childcare calculator is useful to help decide.