Over 13,500 families using Tax-Free Childcare in Northern Ireland to save money on childcare
There are a number of forms of support available towards registered childcare costs, one of which is Tax-Free Childcare. Over the years the uptake for Tax-Free Childcare has been low in Northern Ireland. However, over the last year there has been a significant increase – of around 16.4% – in the number of families claiming support through the scheme. This is the highest increase in Tax-Free Childcare users across the UK, and significantly higher than the UK average rise of 10.4%.
Figures recently released by HMRC show that 13,540 families were using Tax-Free Childcare in Northern Ireland in September 2024, this is an increase of 1,905 over the year. These accounts have been used to pay for childcare for total of 17,600 children, which is an increase of 16.3% since September 2023.
Northern Ireland Childcare Subsidy Scheme
A possible driver for this higher increase in the numbers using Tax-Free Childcare in Northern Ireland is the introduction of the Northern Ireland Childcare Subsidy Scheme (NICSS). This scheme is only available to users of Tax-Free Childcare who have children under primary school age, and gives eligible households an additional 15% discount off their childcare bill.
While a positive development, we know that there are many families who are still missing out on financial support with childcare they could be entitled to, or who could be benefitting more from another form of support.
There are a range of support schemes available to help with registered childcare costs including Tax-Free Childcare, the NI Childcare Subsidy Scheme, Universal Credit and for also for existing claimants Childcare Vouchers and Tax Credits. What is best for your family will depend on your circumstances and the Family Benefits Advice Service can help you work this out, call our helpline on 028 9267 8200.
Families in Northern Ireland are currently receiving letters informing them that they must move from Tax Credits and other benefits onto Universal Credit. It’s important not to move to Universal Credit until you are advised to do so – this process is known as ‘managed migration’ and will help ensure you are not worse off by moving to Universal Credit.
What is Tax-Free Childcare?
The Tax-Free Childcare scheme allows eligible working families to claim 20% of their registered childcare costs, up to £2,000 per child per year, or £4,000 for a child with a disability, from HMRC.
To claim Tax-Free Childcare, both parents need to be in employment (or one person in a single parent household), earning between £183.04 per week, rising to £195.36 in April 2025 (equivalent to 16 hours working at the National Living Wage) and £100,000 per year each. So, for example, a household where each parent is earning £95,000 (combined income of £190,000) would be eligible. Savings are not taken into account in determining if a parent is eligible for Tax-Free Childcare.
Tax-Free Childcare is also available to self-employed parents (where eligible). Households where one parent is working, and the other parent is in receipt of Carer’s Allowance or certain disability benefits can also qualify.
The scheme is open to parents of children under the age of 12 (or age 17 for children with disabilities), and cannot be used alongside any other form of childcare support with the exception of the NI Childcare Subsidy Scheme.
For more detailed information you can download our Comprehensive Guide to Tax-Free Childcare here.
Further information
We would encourage all parents to make sure they are receiving all the financial support they are entitled to with their childcare costs, and to check regularly that they are receiving the best form of support for their family.
If you would like further advice on help with childcare costs or wish to find out more about what financial support you may be entitled to, contact our Family Benefits Advice Service for free, impartial and confidential advice.
Call us on 028 9267 8200 or email hello@employersforchildcare.org – we are here to help.
