From 14 February 2018, tax-free childcare is available to all remaining eligible families: parents whose youngest child is under 12. The new scheme aims to help working parents with the cost of childcare.
According to government, it is quick and easy to apply, and parents could save thousands of pounds each year. For every £8 parents pay into their childcare account, the government will add an extra £2, up to £2,000 per child per year. HMRC has been gradually rolling out tax-free childcare since April 2017.
Parents must each expect to earn (on average) at least £120 per week (equal to 16 hours at the National Minimum or Living Wage). If either parent is on maternity, paternity or adoption leave, or you’re unable to work because you are disabled or have caring responsibilities, you could still be eligible.
However, if either you, or your partner, expect to earn £100,000 or more, you can’t get tax-free childcare. Also, you can’t use tax-free childcare at the same time as childcare vouchers, Universal Credit or tax credits. You can use it with the 15 hours and 30 hours schemes.
You can use tax-free childcare to help pay:
- Registered childminders, nurseries and nannies
- Registered after-school clubs and playschemes
- Registered schools
- Home care workers working for a registered home care agency
Parents, including the self-employed, can apply online for tax-free childcare by visiting Childcare Choices at https://www.childcarechoices.gov.uk.