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Tax Free Childcare

Tax-Free Childcare

 

You can get up to £500 every 3 months (up to £2,000 a year) for each of your children to help with the costs of childcare.

 

This payment goes up to £1,000 every 3 months if a child is disabled (up to £4,000 a year).

 

If you get Tax-Free Childcare, you’ll set up an online childcare account for your child. For every £8 you pay into this account, the government will pay in £2 to use to pay your provider.

 

You can get Tax-Free Childcare at the same time as 30 hours free childcare, if you’re eligible for both.

 

Eligibility

Your eligibility depends on:

  • if you are working
  • your income (and your partner’s income, if you have one)
  • your child’s age and circumstances
  • your immigration status

 

If you are working

You can usually get Tax-Free Childcare if you (and your partner, if you have one) are:

  • in work
  • on sick leave or annual leave
  • on shared parental, maternity, paternity or adoption leave

 

If you’re on adoption leave, you cannot apply for the child you’re on leave for unless you’re going back to work within 31 days of the date you first applied.

 

If your working pattern has changed because of coronavirus (COVID-19), you may still be able to get Tax-Free Childcare.

 

If you’re not currently working

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

You can apply if you’re starting or re-starting work within the next 31 days.

 

Your income

You’ll need to expect to earn a certain amount over the next 3 months. This is at least the National Minimum Wage or Living Wage for 16 hours a week on average.

For example, over the next 3 months you expect to earn at least £1,813.76 - the National Living Wage for people over 25.

 

If you have a partner, they’ll need to expect to earn at least this much too.

If you’re self-employed and do not expect to make enough profit in the next 3 months, you can use an average of how much you expect to make over the current tax year. This earnings limit does not apply if you’re self-employed and started your business less than 12 months ago.

 

If you or your partner have an expected ‘adjusted net income’ over £100,000 in the current tax year you will not be eligible. This includes any bonuses you expect to get.

Your adjusted net income is your total taxable income before any personal allowances and minus things like Gift Aid.

 

Your child

Your child must be 11 or under and usually live with you. They stop being eligible 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:

 

Your immigration status

You will not be eligible if you’re from outside the EEA and your UK residence card says you cannot access public funds.

Your partner can apply instead if they’re from:

  • the UK or EEA
  • outside the EEA and their UK residence card says they can access public funds
  •  

If you get tax credits, Universal Credit, a childcare bursary or grant, 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.

 

Which scheme you’re better off with depends on your situation. Use the childcare calculator to work out which type of support is best for you.

 

Tax credits

Your Working Tax Credit or Child Tax Credit will stop straight away if you successfully apply for Tax-Free Childcare.

 

Childcare vouchers

You must tell your employer within 90 days of applying for Tax-Free Childcare to stop your childcare vouchers or directly contracted childcare. They’ll then stop giving you new vouchers or directly contracted childcare.

 

 

You will have to give HMRC evidence you‘ve left your employer’s childcare voucher scheme, for example:

  • a copy of the letter telling your employer you’re leaving the childcare voucher scheme
  • copies of your payslips showing your pay before and after you’ve left the scheme

 

Universal Credit

Wait until you get a decision on your Tax-Free Childcare application before cancelling your Universal Credit claim.

 

Bursaries

If you or your partner get a childcare bursary or grant or expect to do so within the next 3 months, you cannot get Tax-Free Childcare.

 

Apply

Apply online for Tax-Free Childcare

If you apply for Tax-Free Childcare and someone else already gets 30 hours free childcare for that child, their 30 hours will stop at the end of the next term. You will be eligible for 30 hours free childcare instead.

 

If you have a partner

You must include your partner in your application if you are:

  • married or in a civil partnership and live together
  • not married or in a civil partnership, but living together as though you are

Their employment and income will not affect your eligibility if they:

  • are or will be absent from your household for more than 6 months
  • are a prisoner

You and your partner cannot both have accounts for the same child.

 

If you are separated

You and your ex-partner need to decide who should apply if you are jointly responsible for your child.

If you cannot decide, both of you must apply separately and HMRC will decide who gets a childcare account.

 

Get Tax-Free Childcare: step by step

  1. Step 1: Check you're eligible
    1. You are currently viewing: Check if you're eligible for Tax-Free Childcare
    2. Find out what types of childcare you can use

 

  1. Step 2: Check if you'll be better off

Your tax credits will stop immediately if you successfully apply for Tax-Free Childcare. You will also have to cancel your Universal Credit and childcare vouchers.

Before you apply, check if it's the right option for you.

    1. Check if you'll be better off

 

 

  1. Step 3: Apply for Tax-Free Childcare

There's one application for Tax-Free Childcare and 30 hours free childcare. As part of your application, you will find out if you can get both.

    1. Apply online for Tax-Free Childcare

If you're eligible you'll get a childcare account. You can use this to pay your childcare provider.

 

  1. Step 4: Sign in to your account to pay your childcare provider
    1. Sign in to your childcare account

 

  1. Step 5: Please email the payment reference number to the school, with details of how much you have paid.

 

  1. Reconfirm your details every 3 months

You must confirm your details are up to date every 3 months.

    1. Sign in to your childcare account to confirm your details

 

 

Maybe Sign into Your Account

If you’ve already registered, you can sign in to your childcare account.

 

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