Eligible families will be entitled to a 20% rebate per child on their annual cost of childcare. So for every £80 a family puts into their Tax-Free Childcare account for childcare, the Government will pay in a ‘top-up’ of £20. This is limited to £10,000 per year, per child with a maximum £2,000 saving. Top ups are limited to £20,000 per year for disabled children.
Tax-Free Childcare will be available for children under 12 years old. Children who are registered disabled will be eligible up to the age of 17.
To qualify, parents will have to be in work, earning the equivalent of 16 hours at minimum wage per week and not more than £100,000 per year. TFC is for households where all parents are working; both parents if they live together / a single parent / or one person with parental responsibility.
Yes, but only one person with parental responsibility will be able to open a Tax-Free Childcare account, as the account is per child not per parent, (as it is with Childcare Vouchers).
A parent may not claim Tax-Free Childcare on top of Tax Credits, Universal Credit or Childcare Vouchers.
If a family qualifies for Tax-Free Childcare, they will need to register online via the government website giving details on their household, work and child, and the government will confirm eligibility. Once eligibility is confirmed, an online child account will be opened. Parents will need to reconfirm their eligibility every quarter, in case their circumstances change.
In April 2018 the existing Childcare Voucher Scheme will close to new entrants. If you receive Childcare Vouchers you can continue to do so, if you change employers you will no longer be able to claim Childcare vouchers after April 2018 and will have to switch to Tax Free Childcare.
We have created a Childcare Savings Calculator using current eligibility guidance from the Government, which takes into account your family circumstances and the number of hours of childcare you use. The calculator is a simple way for you to see whether Tax-Free Childcare or the existing Childcare Voucher Scheme is likely to save you more. There is also info on childcarechoices.gov.uk including a comparison calculator.
The criteria for accepting Tax-Free Childcare is the same as it is for Childcare Vouchers, so as long as a childcare provider is Ofsted (or equivalent) registered they should be able to receive payment this way.