Tax-Free Childcare: Your Guide to Saving on Nursery Costs
What is Tax-Free Childcare?
Tax-Free Childcare (TFC) is a valuable government scheme aimed at helping working parents with the cost of childcare, including nursery fees and out-of-school care. Eligible for families with children up to 11 years old, and up to 17 years for children with disabilities, TFC offers significant financial support:
- Up to £2,000 per child per year
- Up to £4,000 per year for children with disabilities
How does Tax-Free Childcare work?
For every £8 you contribute to your TFC account, the government adds £2, offering up to £2,000 per child annually. To qualify, each parent needs to earn a minimum equivalent to 16 hours a week at the national minimum wage but less than £100,000 annually.
Applying for Childcare Funding
Apply for Tax-Free Childcare.
Tax-Free Childcare FAQ
How much is Tax-Free Childcare?
For every £8 deposited, the government contributes £2, turning an £800 contribution into £1,000 in childcare funds. The maximum you can earn from the scheme per year is £2000 per child of £4000 per child with a disability.
Can I combine Tax-Free Childcare with other funding?
Yes, if you are eligible for 15/30 hours childcare funding, you can use this alongside Tax-Free Childcare.
Can I use Tax-Free Childcare with Childcare Vouchers or Universal Credit?
Tax-Free Childcare cannot be used in conjunction with childcare vouchers or Universal Credit.
How do I make payments with Tax-Free Childcare?
Once you’ve applied online, you’ll pay 80% of your childcare fees into your TFC account. You will need to locate your nursery within the TFC account and set up a standing order for the funds to be sent directly to your nursery each month.
How do I Set Up Tax-Free Childcare with my Nursery?
After applying, simply provide your Tax-Free Childcare reference number to your selected nursery and they will link it to your child’s profile to match any payments received.
Can I apply for more than one child?
Yes, if you have more than one child, you will need to create a TFC account for each child.
What age children can I claim Tax-Free Childcare for?
Children are eligible for Tax-Free Childcare until the 1st of September following their 11th birthday.