Help With Childcare Costs
You can get additional help for childcare through Tax-Free Childcare, Childcare Vouchers and Tax Credits
Tax-Free Childcare allows parents to open an online bank account, and use this to pay registered childcare providers directly. For every £8 parents pay into their account, the government adds £2.
This scheme is open to all qualifying parents, including those who are self-employed and those who have been unable to access childcare vouchers because their employer doesn't have a scheme.
In total parents can use their Tax-Free Childcare account to pay for up to £10,000 of childcare, per child, each year. This means you get up to an extra £2,000, per child, from the Government each year. If your child is disabled, you could get up to £4,000 extra each year.
The money can then be used to pay for day nurseries, pre-schools, registered childminders and school based care such as breakfast, after-school and holiday clubs.
Tax-Free Childcare is currently available to parents with children under the age of 12, or 17 if the child is disabled.
You are eligible if:
- Your child is under 6 and usually lives with you
If you (and your partner, if you have one):
- are 16 or over
- live or work in the UK
- are employed or self-employed
- are over 21 and earn on average at least £120 a week, unless in your first year of self-employment. Different rates apply if you're under 21 or an apprentice
- earn less than £100,000 a year each
- don't get other support with your childcare, including from a childcare voucher or salary sacrifice scheme
You may also be eligible if you have a partner and one of you gets any of the following benefits:
- Carers Allowance
- Employment and Support Allowance
- Incapacity Benefit
- Severe Disablement Benefit
You can sign-up online via the HMRC Childcare Service.
Warning - parents can't claim Tax-Free Childcare as well as claiming Tax Credits, Universal Credit or Childcare Vouchers. You will need to work out which scheme suits your family finances the best. Some families are worse off taking Tax-Free Childcare over Childcare Vouchers.
Find out more
Gov.uk - 10 things parents should know about Tax-Free Childcare
Money Saving Expert - Childcare Voucher and Tax-Free Childcare
Your employer may be able to help you with childcare costs by offering childcare vouchers to pay for registered and approved childcare. They can be used to pay for the care of children up 15 years old or 16 if they are disabled. Childcare vouchers are exempt from tax and national insurance for up to £55 per week, which could save you up to £1,196 per year.
The Childcare Voucher Scheme will close for new applicants by the end of March 2018. If you sign up for Childcare Vouchers before April 2018 you can remain on the scheme, and will be able to choose which is more cost-effective for you and your family.
If you are not currently taking Childcare Vouchers, you may wish to consider joining now to have the choice later when the changes occur.
If you’re responsible for at least one child or young person, you may qualify for Child Tax Credit. Tax credits are payments from the Government.
As well as Child Tax Credit, you may be able to apply for Working Tax Credit if you work but have a low income.
Call Inland Revenue on 0845 300 3900 for an information pack and to check if you can receive Tax Credits. You can also use the online Tax Credits Calculator to work out how much money you could be entitled to.
The government provides a childcare calculator for you to get an estimate of how much you could get to help pay for approved childcare. As well as 15 and 30 hours childcare it also calculates if you might be eligible for Tax Credits, Universal Credits, Tax-free Childcare, Childcare Vouchers or help whilst you study.
Check if there are any additional costs to pay. This could include milk, food, nappies, late collection and registration fees.