Tax-Free Childcare

25th Jan 19

Tax-Free childcare

You can receive up to £500 every 3 months (£2,000 a year) for each of your children to help with the costs of childcare. If you qualify the government will pay £2 for every £8 you pay your childcare provider via an online account. They must be signed up to the scheme before you can pay them and benefit from Tax-Free Childcare.

If you’re eligible for 30 hours free childcare you can get both.

Eligibility

To be eligible both you and your partner (if applicable) must:

  1. Be in work (or on parental leave, sick leave or annual leave)
  2. Earn at least the minimum or living wage for 16 hours a week. (Unless you’re self-employed and your business started less than 12 months ago)

You’re not eligible if:

  1. your child does not usually live with you
  2. your child is fostered
  3. you/your partner has taxable income over £100,000
  4. you are from outside the EEA and your UK residence card states you have no access to public funds

If you’re on parental leave, you cannot apply for the child you’re on leave for.

You may still be eligible if your partner is working, and you get Incapacity Benefit, Severe Disablement Allowance, Carer’s Allowance or Employment and Support Allowance.

Your child

Your child must usually live with you and be under 11 years old, their eligibility stops on 1 September after their 11th birthday.

Adopted children are eligible, but foster children are not.

If your child is disabled you may get up to £4,000 a year until they’re 17. They’re eligible for this if they:

  1. get Disability Living Allowance, Personal Independence Payment or Armed Forces Independence Payment
  2. are certified blind or severely sight-impaired.

If you get tax credits, Universal Credit 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.

Your situation will dictate which type of support is more beneficial.  There is a childcare calculator which will help with this.  (https://www.gov.uk/childcare-calculator)

If you are eligible and apply for Tax-Free Childcare, any Working Tax Credit or Child Tax Credit will stop straight away, although childcare vouchers can continue up to 90 days.

HMRC has further guidance online.