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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.

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 June 2019

What is Tax-Free Childcare?

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

If eligible, you set up an online childcare account which you can use to pay your childcare provider directly. For every £8 you pay in, the government will pay in an extra £2. You can get up to £2,000 per child per year, or £4,000 for disabled children.
You can use Tax-Free Childcare to pay for:

• Registered childminders, nurseries and nannies
• Registered after-school clubs and play schemes
• Registered schools
• Home care workers working for a registered home care agency.

To find out more visit the Childcare Choices website

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

You will be eligible for Tax-Free Childcare and 30 hours free childcare if:


• Your child is under 12 years old, or your child is disabled and under 17 years old for Tax-Free Childcare.
• You may be able to claim 30 hours if your child is 3 or 4 and not taking up a state funded reception place. (30 hours is available in England only.)
• The child you’re applying for usually lives with you – you don’t have to be their parent.
• You live and work in the UK, unless you’re a Crown servant or member of the
HM Armed Forces posted overseas.
• You, and any partner, are working, and each earning at least the National Minimum Wage or Living Wage for 16 hours a week – For example, over the next 3 months you expect to earn at least £1,707.68 - the National Living Wage for people over 25 – but less than £100,000 a year each.
• If you’re under 25 or an apprentice, you should expect to earn the equivalent of 16 hours, at the National Minimum Wage or Living Wage which applies to you.
You can still apply for Tax-Free childcare and 30 hours free childcare if you’re:
• On paid sick leave.
• On paid ordinary or additional maternity, paternity or adoption leave, or getting Maternity Allowance, for another child.
• On paid shared parental leave.
• On paid annual leave.


You can also apply for Tax-Free Childcare and 30 hours free childcare if you’re not working but expect to start a new job in the next 14 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.


The full eligibility criteria for 30 hours can be found on GOV.uk

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.


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?

Employer-Supported Childcare (Childcare Vouchers) will continue to run alongside Tax-Free Childcare and the current scheme will remain open to new entrants until October 2018. Parents already using childcare vouchers can continue to do so after this date, 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 

Updated - March 2018

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

First, you can find out which scheme best suits you by completing the Childcare Calculator on Childcare Choices.


If you wish to switch from childcare vouchers to Tax-Free Childcare, you need to notify your employer, and send HMRC confirmation that you’ve stopped your vouchers within three months of successfully applying for Tax-Free Childcare. The email you send your employer telling them you wish to stop using childcare vouchers can be used as confirmation.

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 do I find out if my childcare provider is signed up for Tax-Free Childcare?

Tens of thousands of providers have already signed up. 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.

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 us 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.

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