Tax-Free Childcare can be a great way for your family to save on childcare costs, but we understand the process can seem a bit daunting. In the guide, we’ll explain what Tax-Free Childcare is, how it works, how to apply, and how to make your childcare payments. Tax-Free Childcare is a UK government scheme designed to help working parents with the cost of childcare. Here’s everything you need to know about it:

Tax-Free Childcare is a government initiative that offers eligible families up to £2,000 per year per child to help cover the cost of childcare. This amount increases to £4,000 for a child with a disability.

• How Does It Work?

Savings Account: Parents open an online childcare account through the government's Childcare Choices website. For every £8 you pay into this account, the government adds an extra £2, up to a maximum of £500 every three months (£2,000 per year). For disabled children, the government contributes up to £1,000 every three months (£4,000 per year). You can use the money in your childcare account to pay for approved childcare providers, including nurseries, nannies, childminders, and after-school clubs. You can get Tax-Free Childcare at the same time as 15 0r 30 hours free childcare if you're eligible for both.

• Working Parents: You and your partner (if applicable) must be in work, including self-employment, and each earning at least the National Minimum Wage or Living Wage for an average of 16 hours a week. This usually works out to a minimum income of around £152 a week if you’re 23 or older.
• Income Cap: Neither parent should earn more than £100,000 a year.
• Child’s Age: The scheme is available for children up to the age of 11, or 17 if the child has a disability.
• Residency: You must live in the UK to qualify.

• To check if you are eligible, visit https://www.gov.uk/tax-free-childcare?step-by-step-nav=d78aeaf6-1747-4d72-9619-f16efb4dd89d

• Online Application: Apply through the government’s Childcare Choices website. You'll need your National Insurance number and, if applicable, your partner's details.

​Apply here

• Verification: The government will verify your details, including income, and assess your eligibility.
• Account Setup: If eligible, you'll set up your childcare account, where you can deposit money and receive the government’s top-up.
• Payment:** You can pay your childcare provider directly from your account.

Your childcare provider must be signed up to the Tax-Free Childcare scheme. They could be:

- Nurseries
- Childminders
- After-school clubs
- Nannies
- Other approved care providers

•   When Can You Start?**

Once your account is set up and your childcare provider is approved, you can start making payments. The top-up is instant, so you can immediately use the funds to pay for childcare. Eligibility is reassessed every three months. You'll be prompted to reconfirm your details and circumstances to continue receiving the benefit.

If you are currently using another form of childcare support (e.g., childcare vouchers or tax credits), you need to carefully consider whether switching to Tax-Free Childcare is the right choice, as you cannot revert back.

To explore more about Tax-Free Childcare and see if it’s the right fit for your family, you can visit the [Childcare Choices website](https://www.childcarechoices.gov.uk/).