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

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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.

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

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What you can use Tax-Free Childcare for

You can use it to pay for approved childcare, for example:

  • childminders, nurseries and nannies

  • after school clubs and play schemes

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If your child is disabled

You can use the extra Tax-Free Childcare money you get to help pay for extra hours of childcare. You can also use it to help pay your childcare provider so they can get specialist equipment for your child such as mobility aids. Talk to them about what equipment your child can get.

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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

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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.

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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

Over the next 3 months you and your partner (if you have one) must each expect to earn at least:

  • £1,976 if you’re aged 23 or over

  • £1,909 if you’re aged 21 or 22

  • £1,420 if you’re aged 18 to 20

  • £1,000 if you’re under 18 or an apprentice

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This is at least the National Minimum Wage or Living Wage for 16 hours a week on average.

You can use an average of how much you expect to earn over the current tax year if:

  • you work throughout the year but do not get paid regularly

  • you’re self-employed and do not expect to earn enough in the next 3 months

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If you’re self-employed and started your business less than 12 months ago, you can earn less and still be eligible for Tax-Free Childcare.

For example, you’re eligible if you’re aged 23 or over and you earn £7,904 a year from irregular payments. This is the same as earning £1,976 every 3 months on average.

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Certain types of income will not count towards the minimum amount you must earn to be eligible.

These include:

  • dividends

  • interest

  • income from investing in property

  • pension payments

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

 

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.

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If your child is disabled and usually lives with you, you may get up to £4,000 a year until 1 September after their 16th birthday. They’re eligible for this if they:

  • get Disability Living Allowance, Personal Independence Payment, Armed Forces Independence Payment, Child Disability Payment (Scotland only) or Adult Disability Payment (Scotland only)

  • are certified as blind or severely sight-impaired

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Your immigration status

To be eligible for Tax-Free Childcare, you must have a National Insurance number and at least one of the following:

  • British or Irish citizenship

  • settled or pre-settled status, or you have applied and you’re waiting for a decision

  • permission to access public funds - your UK residence card will tell you if you cannot do this

If you have a partner, they must have a National Insurance number too.

If you’re living in an EU country, Switzerland, Norway, Iceland or Liechtenstein, you (or your partner if you have one) might still be eligible for Tax-Free Childcare if:

  • your work is in the UK

  • the work started before 1 January 2021

  • you’ve worked in the UK at least once every 12 months since you started working here

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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.

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Tax credits

If you successfully apply for Tax-Free Childcare, your Working Tax Credit or Child Tax Credit will stop straight away. You cannot apply for them again.

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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 the vouchers or directly contracted childcare.

You may have to give HMRC evidence of leaving the childcare voucher scheme. For example, a copy of the letter telling your employer you’re leaving the childcare voucher scheme.

If you have a partner who gets vouchers or directly contracted childcare, they’ll need to tell their employer to stop this within 90 days too.

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Universal Credit

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

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Apply

Apply online for Tax-Free Childcare

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