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Tax free childcare information for providers

The Tax-Free Childcare offer is a new scheme being launched by the Government from early 2017 alongside the additional 15 hours free childcare for working parents. This scheme is designed to help working families with their childcare costs.

We will update this page as and when more information becomes available.

What is the Tax Free Childcare Scheme?

Parents will be able to open an online childcare account to pay for their registered childcare provision directly. The scheme is available for childcare for children up to the age of 12 years and 17 years if the child has a disability.

For every £8 a parent pays into the account it will be matched by an additional £2 from Central Government. The total amount of money in the account however can only be spent on childcare.

Parents will receive up to £2,000 per child in Government support per year or £4,000 for a child with a disability. You will need to sign up for an account to ensure your provider can be paid from the fund.

The system will be quick and easy for parents and childcare professionals to apply for and use.

How do parents qualify?

Parents have to be in work and each earning at least £115 per week and no more than £100k per year. This is also available to parents who are self-employed and can be in addition to employer supported childcare.

Parents must not be in receipt of childcare vouchers, tax credits or Universal Credit.

How does it work? - For Parents:

Parents will have an on-line account rather like a bank account.

For every £8 a parent pays into the account it will be matched by an additional £2 from Government. They will be able to monitor how much they have paid into the account and how much they have spent on each child. The top up from the Government will be added to the account on the same day the parent credits it and the whole amount will be available to spend on childcare.

How does it work? - For Childcare Professionals

Childcare Providers will have to sign up for Tax-Free Childcare and this will permit parents to pay directly to your bank account. Parents will find making payments from the tax free payment account will work in the same way as if they had made a payment via an online banking system.

Every child will have its unique ID number and this will enable providers to track which payments are for which child.

How do Parents sign up?

Parents will be able to open an account which they can pay into for the cost of childcare with a registered provider. This account will be set up through the Government website Gov.UK

Tax free childcare will be launched early in 2017. The scheme will then be rolled out to families, with parents of the youngest children able to apply first.

If they have more than one child, they will be able to apply for them all at the same time when their youngest child becomes eligible. All parents that are eligible will be able to join the scheme by the end of 2017.

How do Childcare providers sign up?

You will receive a letter from Government containing your unique ID and you need this to start the online process.

Once you have accessed the secure site you will need to confirm your unique tax payer reference (UTR) number, and you will need to provide your bank details for the account you wish to receive the Tax-free childcare payments into.

Last Updated 18/09/2019

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