Tax-free childcare

Tax-Free Childcare scheme applies to all four nations of the UK.

Tax-Free Childcare will be available to around two million working households to help with their childcare costs. From early 2017, working parents with children under 12 (under 17 for disabled children) can set up an online childcare account to pay their childcare providers directly. For every £8 parents pay in, the Government will add £2, up to a maximum contribution of £2,000 per child, per year (£4,000 per year for disabled children).

To qualify, parents must be in work and each earning at least £115 a week and not more than £100,000 per year.

The government’s new childcare options will include:

  • More generous support for parents on Universal Credit who, since April 2016, can claim up to 85% of childcare costs, up to a monthly limit of £646 for one child or £1,108 for two or more children.
  • From 2017, the Government will introduce Tax-Free Childcare and an additional *15 hours of free childcare for working parents of three and four year olds. Parents will be able to apply for both schemes through a single online application.

*15 hours of free childcare applies to England only. Free education and childcare is also available for children in Scotland, Wales and Northern Ireland.

The current Employer-Supported Childcare voucher scheme, which parents can only use if their employer participates, will remain open to new entrants until April 2018 to ease the transition.


Need further advice or would like to speak to us, then give our Payroll Team a call on 01325 349706 or email them on [email protected]