Tax-Free Childcare allows you to claim up to £500 every 3 months (or £1,000 if your child is disabled) for each of your children to help towards childcare costs.
According to the Tax-Free Childcare rules, the government will pay £2 for every £8 you pay your childcare provider via an online account. The maximum amount you can receive is £2,000 per year per child (or £4,000 if your child is disabled).
Parents will need to open an online account through the government’s website.
I am eligible for Tax-Free Childcare?
Tax-Free Childcare is for families who live with at least one child who is 11 or under. Children stop being eligible on 1 September after their 11th birthday. You may be able to claim for a disable child up until they are 17.
You and your partner (if you have one) can receive Tax-Free Childcare if you are:
- currently in work, restarting work in the next 31 days, or getting parental leave, sick leave or annual leave
- each earning at least the National Minimum Wage or Living Wage for 16 hours a week – the equivalent of at least £120 per week if you’re over 25
- if you’re self-employed and started your business less than 12 months ago, the earning limit does not apply
- if your partner is working but you are unemployed and in receipt of Incapacity Benefit, Severe Disablement Allowance, Carer’s Allowance or Employment and Support Allowance
You can’t get Tax-Free Childcare at the same time as claiming Working Tax Credit, Child Tax Credit, Universal Credit or childcare vouchers.
If you employ a nanny you should be able to use the childcare account to pay their PAYE tax and National Insurance.
What if my child is disabled?
If your child is disabled you can get up to £4,000 a year until they’re 17 if they:
- receive Disability Living Allowance, Personal Independence Payment or Armed Forces Independence Payment
- are registered as blind or severely sight-impaired
How do I apply?
Working parents, including those who are self-employed, can apply online by visiting Childcare Choices. On the same website you’ll find the government’s childcare calculator, which can help you to decide which government childcare support option is best for your circumstances.
As part of your application, you’ll be told if you’re eligible for both Tax-Free Childcare and 30 hours free childcare.
Since opening the childcare service, through which parents can apply for 30 hours free childcare and Tax-Free Childcare, more than 325,000 families have successfully applied. Of these, more than 170,000 have a Tax-Free Childcare account.
If you’re application is delayed because of technical issues, you may be able to claim compensation. For more information visit GOV.UK childcare-service-compensation.