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Tax-Free Childcare: Helping Working Parents Pay for Childcare

The government introduced Tax-Free Childcare (TFC) in 2017, a UK-wide scheme to help working parents pay for childcare for children 0 - 11 years, or if your child is disabled and under 16 years old.

If you're a working parent of a 3 or 4 year old and living in England, you could also get an extra 15 hours free childcare from 3 and 4 year old extended free entitlement. If you're eligible, you'll also get access to an account, where you'll get a code to give to your local authority and childcare provider. Click here to find out more.

Visit www.childcarechoices.gov.uk  - to apply for Tax-Free Childcare or 3 and 4 year old (30 hour) extended free entitlement. It's one single application that will check your eligibility for both. 

 

Last reviewed November 2021.

What is Tax-Free Childcare?

Tax-Free Childcare is a government scheme to support working parents with childcare costs.

You can get up to £500 every 3 months (up to £2,000 a year) for each of your children to help with the costs of childcare. This goes up to £1,000 every 3 months if a child is disabled (up to £4,000 a year).

You can get help paying for childcare if it’s provided by a:

  • registered childminder, nanny, playscheme, nursery or club
  • childminder or nanny with a registered childminder agency or childcare agency
  • registered school
  • home care worker working for a registered home care agency

This is known as ‘approved childcare’.

To find out more visit the Childcare Choices website

Am I eligible for Tax-Free Childcare/30 hours free childcare?

Visit https://www.gov.uk/tax-free-childcare for full eligibility criteria 

You can apply if you’re starting or re-starting work within the next 31 days.

You can’t get Tax-Free Childcare and tax credits, Universal Credit or childcare vouchers at the same time. However, you can apply for 30 hours only, and still receive tax credits, Universal Credit or childcare vouchers.

Check what help you could get with childcare costs Childcare Calculator

How do I pay my provider using Tax-Free Childcare?

Your provider needs to sign up before you can pay them using Tax-Free Childcare.
They can go to childcarechoices.gov.uk/providers to find out more and sign up. Once they’ve signed up, you can add them to your childcare account by clicking on the ‘Your Tax-Free Childcare account’ link on your account homepage. You can pay them directly through your childcare account, and can also set up a regular payment on
a chosen day each month.

You can search for your provider in the ‘Your Tax-Free Childcare account’ section of the account homepage. If your provider is registered as sensitive with their regulator – perhaps because they’re a childminder working from their home address – you’ll need to search for them using their regulator ID and postcode.

When you pay money in, it will take 24 hours to clear before you can pay your provider. Payments to childcare providers will take three days to arrive in their account. When you apply for Tax-Free Childcare, you’ll be given a unique reference number for your child. You need to give this number to your childcare provider so that they can match your payments to your child. You can find this in your welcome pack by clicking the ‘Secure messages’ link on your account homepage.

How do I apply for Tax-Free Childcare/30 hours free childcare?

You can apply for Tax-Free Childcare and 30 hours via Childcare Choices.
You, and your partner if you have one, will need your:

• National Insurance number(s)
• Details of one or more of the following – your UK Passport, tax credits, P60 or
a recent payslip.

In most cases, you’ll be told straight away if your application is successful. In some cases, HMRC may need to do some additional checks to confirm whether you’re eligible, so it’s important to apply in good time. If you’re found not to be eligible HMRC will tell you why.

What will happen to the current Childcare Voucher Scheme?

Parents already using childcare vouchers can continue to do so after October 2018, as long as the employer continues to offer them. 

Childcare providers will be able to receive payments from both Tax-Free Childcare and childcare vouchers.

You can’t use childcare vouchers at the same time as Tax-Free Childcare. Over time, Tax-Free Childcare will replace childcare vouchers and childcare arranged directly by your employer.

To find out more visit - www.childcarechoices.gov.uk 

I’m on childcare vouchers. How do I switch to Tax-Free Childcare?

You must tell your employer within 90 days of applying for Tax-Free Childcare to stop your childcare vouchers or directly contracted childcare. They’ll then stop giving you new vouchers or directly contracted childcare.

You will have to give HMRC evidence you‘ve left your employer’s childcare voucher scheme, for example:

  • a copy of the letter telling your employer you’re leaving the childcare voucher scheme
  • copies of your payslips showing your pay before and after you’ve left the scheme

I don’t have access to the internet. How do I apply?

If you need assistance or do not have access to the internet, you can call the childcare service helpline on 0300 123 4097 and apply over the phone.

How often do I have to reconfirm my eligibility?

You will need to reconfirm you are still eligible for 30 hours and Tax-Free Childcare every three months, using your childcare service account, even if you have not yet taken up your place. It’s easy to do; if your details have not changed you just tick a box to confirm this. You’ll be reminded to do this 4 weeks before the reconfirmation deadline. It’s important you let HMRC know if your circumstances have changed, as they will be checked against other systems.


If you miss the reconfirmation deadline, you will receive a message telling you that your eligibility has lapsed. You should go into your childcare account and reconfirm.
If you reconfirm and you’re no longer eligible, or do not reconfirm, you may be able
to continue your 30 hours childcare place for a short period known as the grace period.

What happens if I reconfirm and am ineligible?

If you are no longer eligible for 30 hours, you will enter a grace period where you may
be able to retain your 30 hours free childcare for a short period of time. You should check your grace period arrangements with your provider.


If you are no longer eligible for Tax-Free Childcare, you can still use the money in your account (including the top-up you accrued while you were eligible) to pay your provider. You can also continue to use your account to pay your provider in future, but you won’t get the government top-up.

Employers for Childcare - Family Benefits Advice Service

Parents

We're here to help

We know parents are juggling a hundred and one things: managing the school schedule; childcare; after school activities; work deadlines; and family commitments. Employers For Childcare is here to help. We can help ease some of the burden on parents by offering a Freephone helpline 0800 028 3008 and personalised advice and guidance to ensure you and your family is getting the financial support you are entitled to.

https://www.employersforchildcare.org/parents/family-benefits-advice-service/