Tax-Free Childcare is a Government scheme that looks to support families with the cost of childcare. Eligible families can save up to £2,000 a year per child (or up to £4,000 if your child is disabled).
Yet it’s suggested that thousands of families aren’t aware that they’re eligible for the scheme and are therefore missing out on these savings. We’re here to urge you to check your eligibility – claiming this financial support could make a great difference, especially during the cost-of-living crisis.
How Does The Tax-Free Childcare Scheme Work?
As part of the registration process, you’ll be asked to set up a childcare account via the Government website. This is where you’ll receive your Government ‘top-up’ (which is 20% of what you pay in) and where you’ll pay your childcare provider. It’s worth noting that you’ll only be able to use this scheme if your childcare provider is also registered (most of which are).
You’ll receive your top-up money once you’ve paid into the account. For every £8 you pay, you’ll receive a £2 top-up. You can then use the funds in your online account to pay your childcare provider.
And if you’re eligible for both Tax-Free Childcare and 30 hours free childcare per week (most 3 and 4 year olds), the great news is that you can use both!
Can I Still Claim Tax-Free Childcare During The Summer Holidays?
Yes! Tax-Free Childcare can be used to pay for holiday and summer clubs, before or after school clubs, as well as nurseries and childminders – as long as the provider is registered for the scheme.
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.”
Who Is Eligible And How Do I Sign Up?
Eligibility depends on several factors, including:
- Your income (and your partner’s income, if you have one)
(you and your partner will both need to be working at least an average of 16 hours a week earning at least the National Minimum Wage, but not exceeding £100,000 a year) - Your child’s age
(you can claim for children aged 0-11, or 0-16 if your child is disabled) - Whether you already claim other types of credit, such as Universal Credit, Working Tax Credit or childcare vouchers
(you can use the Government’s childcare calculator or Childcare choices to determine which type of support would suit you best)
You can find the full eligibility criteria for Tax-Free Childcare here. Once you’ve checked your eligibility, you can apply for your Tax-Free Childcare account here. It will take around 20 minutes, and make sure you have your National Insurance number and Unique Taxpayer Reference (if you have one) to hand. Once registered, you’ll need to re-confirm your eligibility every 3 months – so do pop a reminder in your diary!
©2024 Warr & Co Chartered Accountants. Warr & Co Chartered Accountants is a member of The Institute of Chartered Accountants in England & Wales (ICAEW). Whilst the information detailed here is updated regularly to ensure it remains factually correct, it does not in any way constitute specific advice and no responsibility shall be accepted for any actions taken directly as a consequence of reading it. If you would like to discuss any of the points raised and / or engage our services in providing advice specific to your personal circumstances, please feel free to contact any one of the partners or consultants on 0161 477 6789 or contact us via our website forms. A full list of our directors is available at our registered office. Warr & Co Chartered Accountants are registered to carry our audit work in the UK, our audit registration number is C002961684, for more information please visit www.auditregister.org.uk.