If you’re a working parent in the UK, you could save a lot on your childcare bills each year with the Tax-Free Childcare scheme. The government is helping parents by adding extra money to their childcare account—up to £2,000 per child per year, or £4,000 for children with disabilities.
With school holidays like Easter coming up, now is a good time to check if you qualify and open a Tax-Free Childcare account to reduce your expenses.
What Is Tax-Free Childcare?
Tax-Free Childcare is a UK government programme that helps working parents with childcare costs. When parents pay into a special online childcare account, the government adds an extra 20% to their payments.
For every £8 you deposit, the government adds £2 more, helping you cover expenses like:
- Childminders
- Nursery fees
- Before and after-school clubs
- Holiday clubs and camps
You can get up to:
- £500 every three months per child (total of £2,000 a year)
- £1,000 every three months if the child is disabled (total of £4,000 a year)
Who Can Apply?
To be eligible for the scheme, you must meet the following conditions:
- Your child must be 11 years old or younger (up to 16 if disabled)
- You must be working and earning at least the National Minimum or Living Wage for 16 hours a week on average
- Each parent must earn less than £100,000 a year
- If you’re a couple, your combined income must be under £200,000
- You must not be receiving Universal Credit, tax credits, or childcare vouchers
If you qualify, you can apply on the official website: GOV.UK.
How Much Can You Save?
This scheme is a great way to reduce childcare costs. The government tops up your childcare account by 20%, which can go up to:
- £2,000 per child annually
- £4,000 per disabled child annually
For example, if you pay £400 into your account, the government adds £100, making your total £500.
In December 2023, the UK Government paid out £49.7 million to families through this scheme—showing how useful it is.
Can You Use It with Other Free Childcare Hours?
Yes! You can combine Tax-Free Childcare with:
- 30 hours of free childcare for eligible 3- and 4-year-olds
- New 15 hours of free childcare for 9-month-olds and older (based on eligibility)
This means you can save even more while using both free hours and Tax-Free Childcare together.
Why You Should Apply Now
Childcare costs can be high during school holidays like Easter, summer, and half-term breaks. By opening a Tax-Free Childcare account now, you can start saving money right away.
It’s easy to apply, and once set up, you can continue receiving the government top-ups every time you pay into your account.
If you’re a working parent in the UK, the Tax-Free Childcare scheme is a smart and simple way to reduce your childcare expenses. With potential savings of up to £2,000 per year for each child, or £4,000 for children with disabilities, this benefit can make a big difference in your family budget.
The scheme is easy to use, flexible, and can be combined with other childcare support. Just make sure you meet the income and eligibility criteria, and apply through GOV.UK to get started. With holidays approaching, now is the perfect time to take advantage of this support and ease the burden of childcare costs.
FAQs
What is Tax-Free Childcare?
Tax-Free Childcare is a UK government scheme that helps working parents save money by adding 20% extra to the amount they pay into a childcare account.
How much can I save per child?
You can save up to £2,000 per year per child, or £4,000 if your child is disabled, through government top-ups.
Who is eligible for Tax-Free Childcare?
Parents earning under £100,000 each (or under £200,000 combined) with children aged 11 or under (or up to 16 if disabled), who are working at least 16 hours a week.
Can I use this with free childcare hours?
Yes, you can use Tax-Free Childcare along with 15 or 30 hours of free childcare, depending on eligibility.
Where do I apply for Tax-Free Childcare?
You can check eligibility and apply at the official government website: GOV.UK.
Can I get Tax-Free Childcare if I receive Universal Credit?
No, families receiving Universal Credit, tax credits, or childcare vouchers are not eligible for Tax-Free Childcare.
What childcare services can I use this for?
You can use it to pay approved providers like childminders, nursery schools, after-school clubs, and holiday camps.
