Tax-Free Childcare - frequently asked questions
Are parents able to use Tax-Free Childcare in addition to workplace salary sacrifice schemes, such as childcare vouchers?
No. You can’t use Tax-Free Childcare and workplace salary sacrifice schemes, such as childcare vouchers, together. If a parent decides to apply for Tax-Free Childcare, they will have to notify their employer and leave their childcare voucher scheme within 3 months from the date of their Tax-Free Childcare declaration.
Tax-Free Childcare is replacing workplace salary sacrifice schemes, which closed to new entrants in October 2018. It offers wider and more flexible support with childcare costs to more working families.
What can Tax-Free Childcare be used for; does it include lunches, music lessons etc?
Families can use Tax-Free Childcare to pay for any approved childcare, including holiday clubs, breakfast and after school clubs, child minders and nurseries. It can also be used for nursery deposits, retainers (for holiday periods), childcare payments in advance and extras, such as lunches or trips, if/when these are included as part of the overall childcare costs charged by the childcare provider.
Tax-Free Childcare can’t be used for any part a child’s compulsory education costs. This includes:
- school lunches
- private lessons during school time, such as private music lessons
- school uniform
- school lunches
- costs for school trips within the normal school day
My child's school uses an independent payment provider to pay for various services. Can I use Tax-Free Childcare to pay for before/after school and holiday childcare (including breakfast clubs, after school activities and holiday clubs)?
Tax-Free Childcare payments can be made through online payment providers provided they are signed to do so with HMRC. You can check with your payment provider and/or school whether this option is available to use. If the option is not available, you might want to encourage them to do so.
Can I use Tax-Free Childcare if the childcare is provided by a family member?
You can use Tax-Free Childcare to pay a relative (like a grandparent) for childcare as long as they're a registered and approved childcare provider and the childcare takes place outside your child's home.
You cannot use Tax-Free Childcare for childcare provided by a parent, stepparent, partner's partner or anyone who has parental responsibility. Or a foster parent. This type of childcare is not considered to be registered and approved childcare for Tax-Free Childcare.
Will using Tax-Free Childcare affect my Child Benefit?
No, using Tax-Free Childcare has no effect on claiming Child Benefit. Child Benefit is paid to a parent, if eligible, to help them raise a child they are responsible for. Tax-Free Childcare contributes towards working parents’ childcare costs.
A parent cannot claim Tax-Free Childcare at the same time as Childcare Vouchers or Universal Credit.
Can parents of a disabled child claim Tax-Free Childcare alongside disability allowances?
Parents can claim Tax-Free Childcare if their child is in receipt of any of the following:
Is there a maximum amount that parents can put in the Tax-Free Childcare account?
There is no limit on the amount a parents can deposit into the account, but the maximum government top-up they will receive every 3 months is £500 for each child, or £1000 if their child is disabled. Once a parent has reached the maximum top-up, they will need to wait until they enter their next eligibility period before they can get further government contributions.
Is Tax-Free Childcare available when I'm on parental or adoption leave?
If you’re on maternity, paternity, shared parental or adoption leave, you can usually get Tax-Free Childcare, but you should apply from a certain date. That date will depend on when you return to work.
| Date of returning to work | When to apply |
|---|---|
| Between 1 May to 30 September | From 1 April |
| Between 1 October to 31 January | From 1 September |
| Between 1 February to 30 April | From 1 January |
and will expect to earn on average at least the equivalent to 16 hours a week at the National Minimum or Living Wage and not have adjusted net income of more than £100k a year when you return.
Is there a minimum amount I must pay for childcare per week or month to use Tax-Free Childcare?
There is no minimum amount that you need to deposit into your Tax-Free Childcare account. For every £8 you pay into your account, the government adds an extra £2.
You can get up to £500 every 3 months in top-up (up to £2,000 a year) for each of your children to help with the costs of childcare. This goes up to £1,000 every 3 months if your child is disabled (up to £4,000 a year).
Any money in your account will remain for you to pay your childcare provider when required. If you withdraw funds, the government will take back it’s £2 ‘top up’ for every £8 withdrawn.
Will I be reminded to reconfirm my details?
Yes, you will receive a reminder:
- the first reminder is sent 4 weeks before reconfirmation is due.
- a further reminder is sent 2 weeks before reconfirmation is due.
- a notification is sent on the deadline date of reconfirmation to notify you that your Tax-Free Childcare top-up payments have stopped
This message will come from GOV.UK. Please remember to make sure that your details are up to date.
I can see my childcare provider’s details but unable to add them to my Tax-Free Childcare account, what can I do?
Your childcare provider must be signed up to Tax-Free Childcare before you can pay them and benefit from this scheme. You can send them a nudge notification asking them to sign-up for the scheme via your online account. Alternatively, you can contact them directly to check if they are signed up.