Tax-Free Childcare is a government scheme that helps with childcare costs up to a maximum of £2,000 for each eligible child each year (£4,000 if your child is disabled). Tax-Free Childcare is a UK-wide scheme covering England, Scotland, Wales and Northern Ireland.
The scheme is open to all parents of children under 12 (or under 17 if disabled). To apply, you must open a Tax-Free Childcare account online.
If you want to find out what help you might be entitled to try the government’s childcare calculator.
Who is Tax-Free Childcare for?
To be eligible for the Tax-free Childcare Scheme, you must be working (and if you have a partner they must work too), and you must not be receiving any support through Tax Credits or Universal Credit. Most parents who are eligible for Universal Credit or Tax Credits can save more money using the childcare elements of these benefits instead of using Tax-Free Childcare.
Usually both parents in a couple must work on an employed or self-employed basis and have an income of at least £2,167 each every three months. Recently self-employed people are allowed start-up periods where this income level doesn’t have to be met, or can use an average over the tax year.
Periods on maternity leave, sick leave, paternity leave, parental leave, adoption leave and shared parental leave will count as being in work. However, eligibility is limited to the last 31 days of leave where parents are claiming for a new child, whose birth or adoption led to the time off.
If you work but your partner is unable to work because they are disabled or care for a disabled person, you may still be eligible for the Tax-Free Childcare Scheme.
To be eligible the household must have one child under the age of 12, or a child with a disability under the age of 17. It will run according to the school year – so that disabled children will be eligible until the September after their 16th birthday, while other children will be eligible until the September after their 11th birthday.
How much can I receive?
Parents pay money into a childcare account, which the government tops-up. The maximum help is set at £2,000 per year per child (or £4,000 if your child is disabled). This is limited to £500 every 3 months (£1,000 if your child is disabled).
For every £8 you put into the account, the government will put in £2 which you can use to pay your childcare provider.
Frequently asked questions
Below is a summary of the most frequently asked questions we receive about the free childcare schemes on our helpline.
Applying for Tax-Free Childcare
How do I apply for Tax-Free Childcare?
I’m due to start work / return to work soon. Do I have to wait until I start work to apply for Tax-Free Childcare?
No. If you are due to start work (or return to work) within the next 31 days, you can apply for Tax-Free Childcare as long as you and your partner are eligible and you will each have an income of at least £2,167 every three months. This works out to roughly £166 each per week.
To apply, you must open a Tax-Free Childcare account online.
If you are having difficulty with your Tax-Free Childcare account you can call the childcare service helpline.
I am on a visa and have no recourse to public funds. Am I still eligible for Tax-Free Childcare?
You may not be able to apply for Tax-Free Childcare if you are on a visa with no recourse to public funds. Government funded early education and childcare is not a ‘public fund’ for immigration purposes, so can be accessed by a child regardless of their immigration status.
The parent who applies for Tax-Free Childcare will need to meet a residence requirement. In order to meet the requirement, the parent applying must have one of the following:
- British or Irish citizenship
- Settled or pre-settled status granted under the EU Settlement Scheme
- A pending EU Settlement Scheme application
- Immigration permission that allows access to public funds, such as indefinite leave to remain or refugee leave
A parent who has NRPF will not meet the residence requirement. In two-parent households, at least one parent on the application will need to meet the residence requirement. If a single parent or both parents in a household have NRPF, the family will be unable to access 30 hours childcare.
For more information on eligibility and how to apply, see the government site.
I’m on maternity, adoption or shared parental leave. Am I eligible for Tax-Free Childcare?
Periods of maternity and statutory family leave are counted as being in work, and the earnings requirement does not apply. This means that you can be eligible for Tax-Free Childcare while on maternity, adoption or shared parental leave.
You may claim or continue to claim Tax-Free Childcare for older children while on statutory family leave. However, you may not be eligible to receive Tax-Free Childcare for the child you are on leave to care for. In this case, eligibility will be limited to the last 31 days of leave where you are claiming for a new child whose birth led to the time off.
I’m on maternity leave and want to do KIT days. Can I claim Tax-Free Childcare for KIT days?
Unfortunately not for the child that you are on leave to care for, unless you are taking KIT days within the 31 days prior to your return to work. This is because you are not eligible to claim Tax-Free Childcare while on maternity leave for the child you are on leave to care for, until the last 31 days of leave.
You can claim or continue to claim Tax-Free Childcare for older children.
We advise that when negotiating working KIT days with your employer, that you discuss childcare arrangments and expenses. For more information on KIT days, see our article on working during maternity and family leave.
My child has a disability. Am I eligible for extra Tax-Free Childcare?
For the purposes of Tax-Free Childcare, a disabled child means a child who is receiving Disability Living Allowance (DLA), Personal Independence Payment (PIP), Child Disability Payment, an armed forces independence payment, or a payment from elsewhere in the European Economic Area which has a similar character to those benefits.
Children who are certified as severely sight impaired or blind are also disabled for the purposes of Tax-Free Childcare.
Using Tax-Free Childcare with other schemes
Can I claim Tax-Free Childcare while using 15/30 hours free childcare?
Yes, if you are claiming Tax-Free Childcare, you can still use 15 or 30 free hours childcare. You can use Tax-Free Childcare to cover extra childcare costs you may have.
However, you may not use Tax-Free Childcare while claiming Tax Credits or Universal Credit. For more information, see our page on what childcare schemes can and can’t be used together.
I am on an Employer Supported Childcare/Childcare Voucher scheme. Should I apply for Tax-Free Childcare?
If you make an application for Tax-Free Childcare while receiving childcare vouchers, your vouchers will end and you will not be able to re-apply. So you should consider carefully which scheme you are better off using before deciding to apply for Tax-Free Childcare.
Only those signed up to a voucher scheme prior to October 2018 can continue in this type of scheme. People who are already using the childcare voucher scheme are able to continue using it if they wish (unless their employer brings it to an end).
The maximum you can receive through Tax-Free Childcare is £2,000 each year. Therefore, if you receive more than £2,000 towards your childcare costs in an employer supported scheme, you are likely better off staying in that scheme.
If you are unsure how much Tax-Free Childcare you would be entitled to, or whether you would be better off on Tax-Free Childcare, try the government’s childcare calculator.
I am on Tax Credits or Universal Credit. Should I apply for Tax-Free Childcare?
You won’t be able to use the Tax-free Childcare Scheme if you are receiving Tax Credits or Universal Credit – if you register for Tax-Free Childcare, your Tax Credits or Universal Credit will stop. It is important that you check whether you will be better off claiming Tax-Free Childcare, or claiming the childcare elements of Tax Credits or Universal Credit. You can use the government calculator to do this.
The childcare element of Working Tax Credit can help towards the costs of registered or approved childcare. However, in most cases, you can only get this if you are already on either Child Tax Credit or Working Tax Credit.
The childcare element of Universal Credit (UC) can help towards the costs of registered or approved childcare. If you qualify for UC and are eligible for the childcare element, you can claim up to 85% of your childcare costs up to a maximum of £646 for one child or £1108 for more than one child.
This advice applies in England, Wales and Scotland. If you live in another part of the UK, the law may differ. Please call our helpline for more details. If you are in Northern Ireland you can visit the Labour Relations Agency or call their helpline Workplace Information Service on 03300 555 300.
If you have further questions and would like to contact our advice team please use our advice contact form below or call us.
The information on the law contained on this site is provided free of charge and does not, and is not intended to, amount to legal advice to any person on a specific case or matter. If you are not a solicitor, you are advised to obtain specific legal advice about your case or matter and not to rely solely on this information. Law and guidance is changing regularly in this area.
We cannot provide advice on employment rights in Northern Ireland as the law is different. You can visit the Labour Relations Agency or call their helpline Workplace Information Service on 03300 555 300.