Save Up To £2,000 A Year On Childcare Costs per Child

During the current cost-of-living-crisis, eligible families might be able to save up to £2,000 a year on childcare costs or £4,000 if your child is disabled.


How does the Tax-Free Childcare Scheme Work?

As part of the registration process, you'll be asked to register a childcare account. If eligible, for every £8 you pay into this account, the government will pay in £2. As long as your childcare provider is also registered (most are), you can use the funds to pay your childcare provider.


With summer holidays coming up, now is as good a time as any to sign up for this government backed scheme. Tax-Free childcare can be used to pay childminders, nurseries, nannies, breakfast and after school clubs as well as all sorts of holiday activities and even some holiday camps.


As the Exchequer Secretary to the Treasury, Helen Whately, states:


"There are lots of fantastic holiday clubs and childcare providers to help working parents during the upcoming summer holidays, so now is the time to take advantage of this support."


Importantly, your provider must be registered with this scheme and a regulator such as Ofsted or Childcare Register. However, over 68, 000 childcare providers have signed up. When you register you'll be able to see details of all registered providers.


Who is Eligible?

The scheme is available to ALL workers including self-employed. If you have a partner, you both need to be in work to qualify. This scheme is also only available to children aged 11 or younger (17 if your child has a disability).


There are some circumstances in which you don't work but are still able to qualify such as:

  • You are on sick leave

  • You are on annual leave

  • You are on shared parental, maternity, paternity or adoption leave

  • You or your partner is in work and the other isn't able to work and receive Incapacity Benefit, Severe Disablement Allowance, Carer’s Allowance or contribution-based Employment and Support Allowance.


You'll need to expect to earn a certain amount over the next three months. This is at least £152 a week, National Minimum Wage for 16 hours a week on average. If you have a partner, they'll need to earn at least this much too.


If you're self-employed and do not expect to make enough profit in the next three months, you can use an average of how much you expect to make over the current tax year. If you've only been self-employed for less than twelve months, the minimum income requirement doesn't apply to you.


Each partner must have an expected adjusted net income less than £100,000 in order to qualify.


You cannot get Tax-Free Childcare at the same time as claiming Working Tax Credit, Child Tax Credit, Universal Credit or childcare vouchers


You can find the full eligibility for Tax-Free Childcare here. Once you've checked you are eligible, you can apply for your Tax-Free Childcare account here. Make sure you have your National Insurance number and Unique taxpayer Reference (if you have one) on hand.


You MUST reconfirm every three months or risk missing out on the top up.