Tax-Free Childcare FAQs

Frequently Asked Questions

• What is Tax-Free Childcare?

  Tax-Free Childcare allows eligible working families to claim 20% of their childcare costs, up to £2,000 per child per year (or £4,000 for a child with a disability), from the Government.

  To learn more, download ‘A comprehensive guide to Tax-Free Childcare’ (by clicking on the ‘Download our guide’ link at the top of this page) or contact our Family Benefits Advice Service on 028 9267 8200 for advice on your own personal circumstances.

• Who is eligible for Tax-Free Childcare?

  To be eligible for Tax-Free Childcare:

  • Both parents, or one parent in a single-parent household, must be working, earning between the equivalent of 16 hours per week a the National living or National Minimum Wage and £100,000 per year per parent.
  • Self-employed parents are eligible to join (same income rules apply).

  Tax-Free Childcare can be used to pay for registered childcare for children under the age of 12 (under age 17 for children with a disability).

  Download ‘A comprehensive guide to Tax-Free Childcare’ to find out more or contact our Family Benefits Advice Service on 028 9267 8200 to get advice on your own personal circumstances.

• Can I use Tax-Free Childcare alongside other forms of help with childcare costs?

  No, Tax-Free Childcare cannot be used in conjunction with Childcare Vouchers, Universal Credit or Tax-Credits (including both Child Tax Credit and Working Tax Credit). This is different to the Childcare Voucher scheme which can be used in conjunction with Tax Credits or Universal Credit.

  If you join the Tax-Free Childcare scheme your Tax Credits or Universal Credit will be terminated and you will remain ineligible while you are still a member of the scheme. If you claim Tax Credits or Universal Credit it is important that you are aware of this before considering joining Tax-Free Childcare.

  If you currently use Childcare Vouchers, and are eligible for Universal Credit or Tax Credits, you can claim Childcare Vouchers and Tax Credits or Universal Credit at the same time.

• Will my family be better off on Childcare Vouchers or switching to Tax Free Childcare?

  This will depend on each family’s individual circumstances. Contact Employers For Childcare’s Family Benefits Advice Service Freephone 028 9267 8200 for a personalised ‘better-off’ calculation.

• Can I switch between Childcare Vouchers and Tax-Free Childcare?

  If a parent leaves their employer’s Childcare Voucher scheme in order to use Tax-Free Childcare they will be unable to switch back to Childcare Vouchers, even if they find they are worse off using Tax-Free Childcare.

• Does my employer have a role in Tax-Free Childcare?

  Employers do not have a role in the Tax-Free Childcare scheme, it is administered by HMRC and parents are responsible for managing their own Tax-Free Childcare accounts.

  Employers can choose to pay into an employee’s Tax-Free Childcare account, however there is no direct saving for employers through the Tax-Free Childcare scheme whereas under the Childcare Voucher scheme employers can save on Employer’s National Insurance Contributions. If you would like any further information on this, please contact our Family Benefits Advice Service on 028 9267 8200.

• I am subject to immigration control with no recourse to public funds. Am I able to use TFC?

  A parent who is subject to immigration control, and has no recourse to public funds, is unable to open a Tax-Free Childcare account.

  If you have a partner who is not subject to immigration control they may be able to open an account that you can pay into.

  Parents who are subject to immigration control, with no recourse to public funds – and who are currently registered for Childcare Vouchers – can continue to use the Childcare Voucher scheme. Contact our Family Benefits Advice Service for free, impartial and confidential advice on 028 9267 8200.

• Will all childcare providers be able to accept payments through Tax-Free Childcare?

  All childcare providers will be able to accept payments through Tax-Free Childcare provided they: are registered or approved as childcare providers in the UK, and have registered with HMRC to accept payments from parents.

  Providers can sign up at any time, but it can take up to 12 weeks for registration to be processed. If you are a childcare provider and you have not yet signed up to receive Tax-Free Childcare payments, then you should do so now.

  More information is available in ‘A comprehensive guide to Tax-Free Childcare’.

• Must parents be working to be eligible for Tax-Free Childcare

  Both parents in a couple must usually be working. However, if one parent meets the work requirements and the other is unable to work, for example, due to a disability or caring responsibilities, then they may still be able to claim Tax-Free Childcare. For example, parents claiming Carer’s Allowance or Contributory Employment and Support Allowance (ESA) will be eligible for the scheme, provided the other parent is also eligible.

• Can I apply for Tax-Free Childcare if I am a single parent?

  Yes, if you are a single parent you can apply for Tax-Free Childcare provided you meet the eligibility requirements. Only one account can be set up per child so if parents are separated, and both want to contribute to childcare costs, this can be done through one account managed by the main carer.

• Can I pay into a Tax-Free Childcare account while on maternity leave?

  You cannot open a Tax-Free Childcare account for your newborn child until 31 days before you return to work. However you can have Tax-Free Childcare accounts for any older children while on maternity leave for the newborn. You will be able to retain and pay into those accounts during your maternity leave period.

  Typically you cannot use Tax-Free Childcare to pay for childcare on days that you are not working. You can, however, use Tax-Free Childcare for non-working days if your provider requires you to block book (for example, by week) or pay in order to retain a space, or you need access to childcare to facilitate your work.