Are you aware that there are different schemes available to help towards your childcare costs? To find out which is the best option for you, please read below.

What do I need to know?

If you are a working parent, then you are eligible to claim a tax-free top up from the Government to help with childcare costs.

You could be given a top-up which will be worth £2,000 a year.

There is a higher top up of £4,000 a year available for disabled children.

If you want to receive the top-up, then you must open an account online and the government will provide a top-up of £2 for every £8 deposited by the parents, up to the limits above.

The money in the account will then be used towards paying for childcare with a registered provider.

Does it apply to me?

The government childcare scheme is open to both the employed and the self-employed.

To be eligible you and your partner must earn a minimum of £131.36 per week. This totals up to £1,707.68 over three months.

The limit above does not apply if you are self-employed and started your business within the last three months.

If you or your partner have a combined income of more than £100,000 then you will not be eligible for tax-free childcare.

What are the conditions?

Tax-free childcare is only available to children who are aged 11 and under and live with the claimant.

Children are not eligible for the scheme once the 1 September following their 11th birthday has passed.

Disabled children remain eligible for tax-free childcare until they are 17.  

Tax-free childcare can only be used to pay for approved childcare such as childminders, nannies, after school clubs, nurseries and playschemes that have signed up to the scheme.

Employer-supported childcare and childcare vouchers

You should be aware that you cannot claim both the government childcare scheme and employer-provided childcare vouchers or employer-supported care, as you can only claim one.

If you apply for tax-free childcare, then you should inform your employer within 90 days of making the application.

How do I apply?

If you believe you are eligible and you want to apply for tax-free childcare, then you can fill in an application online at www.gov.uk/apply-for-tax-free-childcare.

Further Actions

You should weigh up the options that are available to you and decide which would be the most tax-efficient option for you.

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Any questions?
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