Tax Free Childcare
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).
If you’ve already registered, you can sign in to your childcare account on the Gov.uk website
If you get Tax-Free Childcare, you’ll set up an online childcare account for your child. For every £8 you pay into this account, the government will pay in £2 to use to pay your provider.
You can get Tax-Free Childcare at the same time as 30 hours free childcare if you’re eligible for both.
What you can use Tax-Free Childcare for
You can use it to pay for approved childcare, for example:
- childminders, nurseries and nannies
- after school clubs and play schemes
Your childcare provider must be signed up to the scheme before you can pay them and benefit from Tax-Free Childcare.
Check with your provider to see if they’re signed up.
If your child is disabled
You can use the extra Tax-Free Childcare money you get to help pay for extra hours of childcare. You can also use it to help pay your childcare provider so they can get specialist equipment for your child such as mobility aids. Talk to them about what equipment your child can get.
Your eligibility depends on:
- if you are working
- your income (and your partner’s income, if you have one)
- your child’s age and circumstances
- your immigration status
If you are working
You can usually get Tax-Free Childcare if you (and your partner, if you have one) are:
- in work
- on sick leave or annual leave
- on shared parental, maternity, paternity or adoption leave
If you’re on adoption leave, you cannot apply for the child you’re on leave for unless you’re going back to work within 31 days of the date you first applied.
If you’re not currently working
You may still be eligible if your partner is working, and you get Incapacity Benefit, Severe Disablement Allowance, Carer’s Allowance or contribution-based Employment and Support Allowance.
You can apply if you’re starting or re-starting work within the next 31 days.
Over the next 3 months you and your partner (if you have one) must each expect to earn at least:
- £1,976 if you’re aged 23 or over
- £1,909 if you’re aged 21 or 22
- £1,420 if you’re aged 18 to 20
- £1,000 if you’re under 18 or an apprentice
This is at least the National Minimum Wage or Living Wage for 16 hours a week on average.
You can use an average of how much you expect to earn over the current tax year if:
- you work throughout the year but do not get paid regularly
- you’re self-employed and do not expect to earn enough in the next 3 months
If you’re self-employed and started your business less than 12 months ago, you can earn less and still be eligible for Tax-Free Childcare.
For example, you’re eligible if you’re aged 23 or over and you earn £7,904 a year from irregular payments. This is the same as earning £1,976 every 3 months on average.
Certain types of income will not count towards the minimum amount you must earn to be eligible.
- income from investing in property
- pension payments
If you or your partner have an expected ‘adjusted net income’ over £100,000 in the current tax year, you will not be eligible.
Your child must be 11 or under and usually live with you. They stop being eligible on 1 September after their 11th birthday.
Adopted children are eligible, but foster children are not.
If your child is disabled and usually lives with you, you may get up to £4,000 a year until 1 September after their 16th birthday. They’re eligible for this if they:
- get Disability Living Allowance, Personal Independence Payment, Armed Forces Independence Payment, Child Disability Payment (Scotland only) or Adult Disability Payment (Scotland only)
- are certified as blind or severely sight-impaired
Your immigration status
To be eligible for Tax-Free Childcare, you must have a National Insurance number and at least one of the following:
- British or Irish citizenship
- settled or pre-settled status, or you have applied and you’re waiting for a decision
- permission to access public funds - your UK residence card will tell you if you cannot do this
If you have a partner, they must have a National Insurance number too.
If you get tax credits, Universal Credit, a childcare bursary or grant, or childcare vouchers
You cannot get Tax-Free Childcare at the same time as claiming Working Tax Credit, Child Tax Credit, Universal Credit or childcare vouchers.
Which scheme you’re better off with depends on your situation. Use the childcare calculator to work out which type of support is best for you.
If you successfully apply for Tax-Free Childcare, your Working Tax Credit or Child Tax Credit will stop straight away. You cannot apply for them again.
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 the vouchers or directly contracted childcare.
You may have to give HMRC evidence of leaving the childcare voucher scheme. For example, a copy of the letter telling your employer you’re leaving the childcare voucher scheme.
If you have a partner who gets vouchers or directly contracted childcare, they’ll need to tell their employer to stop this within 90 days too.
Wait until you get a decision on your Tax-Free Childcare application before cancelling your Universal Credit claim.
If you or your partner get a childcare bursary or grant or expect to do so within the next 3 months, you cannot get Tax-Free Childcare.
Apply online for Tax-Free Childcare
If you apply for Tax-Free Childcare and someone else already gets 30 hours free childcare for that child, their 30 hours will stop at the end of the next term. You will be eligible for 30 hours free childcare instead.
If you have a partner
You must include your partner in your application if you are:
- married or in a civil partnership and live together
- not married or in a civil partnership, but living together as though you are
Their employment and income will not affect your eligibility if they:
- are or will be absent from your household for more than 6 months
- are a prisoner
You and your partner cannot both have accounts for the same child.
If you are separated
You and your ex-partner need to decide who should apply if you are jointly responsible for your child.
If you cannot decide, both of you must apply separately and HMRC will decide who gets a childcare account.
This information has been taken from the Gov.uk website – March 2023, please check the website for further details https://www.gov.uk/tax-free-childcare