Date posted: 9th Aug 2023
Tax-Free Childcare (TFC) accounts can be used to pay for approved childcare for children aged 11 or under, or 16 if the child has a disability. This can include paying for a summer holiday club or childminder.
The account can also be used to pay nursery fees, or to pay for breakfast or after school clubs in term-time, as well as out of school activities.
Opening a TFC account is quick and easy and can be done at any time of the year. Families who have not yet signed up should check their eligibility and apply online today.
For every £8 paid into an online account they will receive an additional £2 from the government. This means parents and carers can receive up to £500 every 3 months (£2,000 a year for each child), or £1,000 (£4,000 a year for each child) if their child is disabled.
Money can be deposited at any time to be used straight away, or whenever it is needed. Unused money in the account can be withdrawn at any time, albeit the tax top up cannot.
Eligibility
Families could be eligible for TFC if they:
- Have a child or children aged 11 or under. They stop being eligible on 1 September after their child’s 11th birthday. If their child has a disability, they can receive support until 1 September after their child’s 16th birthday;
- Earn, or expect to earn, at least the National Minimum Wage or Living Wage for 16 hours a week, on average;
- Each earn no more than £100,000 per annum; and
- Do not receive tax credits, Universal Credit or childcare vouchers.
Some tax planning opportunities may arise if you earn over £100,000 and want access to TFC. Please give us a call if you would like further information.
