Looking for ways to save money on your child’s daycare, nanny, or after-school club in the UK? The government has a Tax-Free Childcare scheme that can help parents cut down their childcare bills by up to £2,000 per child every year. Many parents may not know they’re missing out on this useful benefit. This article will explain who can apply, how it works, and how much you can save.
What Is Tax-Free Childcare?
The Tax-Free Childcare scheme gives parents extra money from the government to help with the cost of childcare. Here’s how it works: for every £8 you pay into a special online childcare account, the government adds £2. You can use this money to pay for registered childcare providers like nurseries, nannies, after-school clubs, and playgroups.
This means you can get up to £500 every three months for each child, which totals £2,000 a year. If your child is disabled, you can get up to £1,000 every three months or £4,000 a year.
Who Can Apply for Tax-Free Childcare?
To use this scheme, your child must usually live with you and be aged 11 or under. They remain eligible until 1st September after their 11th birthday. For disabled children, the age limit is extended until 1st September after their 16th birthday, but they must be getting Disability Living Allowance, Personal Independence Payment, Armed Forces Independence Payment, or be certified blind or severely sight-impaired.
You must also be working and earning at least the national minimum wage for 16 hours per week, and earn less than £100,000 a year. This rule applies to both parents if you’re a couple.
Can Self-Employed Parents Apply?
Yes, self-employed parents can also use the scheme. If you’ve been self-employed for less than a year, the minimum income rule doesn’t apply. This gives new business owners a chance to get help from the start.
What If You’re Not Working?
Even if you’re not currently working, you might still qualify. This includes people who are on sick leave, annual leave, maternity, paternity, shared parental or adoption leave. If one parent is working and the other gets Carer’s Allowance, Incapacity Benefit, or similar support, the family can still be eligible.
How to Apply
You can open an online Tax-Free Childcare account for free on the official GOV.UK website. Once your account is active, you can start paying money in, and the government will add their part automatically.
What About Free Childcare Hours?
Not all parents need to pay for full-time childcare. In England, you may also be eligible for 15 or 30 hours of free childcare each week, depending on your child’s age and your work status.
Working parents of children aged 9 months to 2 years can now get 15 hours of free childcare a week. This will increase to 30 hours in September 2025. All parents of 3 and 4-year-olds can claim 15 hours free, but working parents may get 30 hours, if they meet the income rules.
Good news — you can combine the Tax-Free Childcare scheme with these free hours, saving you even more money.
Help for Parents on Universal Credit
If you claim Universal Credit and are working, you can get back up to 85% of your childcare costs. The maximum you can get is £1,031.88 a month for one child and £1,768.94 for two or more children. This is a huge support for low-income families.
The UK government’s Tax-Free Childcare scheme is a smart way to reduce your childcare expenses. Whether you’re a full-time worker, self-employed, or even on certain benefits, this scheme could help you save a big chunk of money each year. Combine it with other free childcare offers to lower your costs even more. Don’t miss out — check if you’re eligible and open your free account today on GOV.UK. Every bit of savings helps when raising a child!
FAQs
What is Tax-Free Childcare in the UK?
Tax-Free Childcare is a UK government scheme where parents get a £2 top-up from the government for every £8 they pay into a childcare account. You can save up to £2,000 per child per year, or £4,000 if your child is disabled.
Who is eligible for Tax-Free Childcare?
Parents must earn at least the minimum wage for 16 hours a week and less than £100,000 annually. This applies to both parents if you’re a couple. Children must be under 12, or under 17 if disabled.
Can self-employed parents use Tax-Free Childcare?
Yes, self-employed parents can apply. If you’ve been self-employed for less than 12 months, you don’t need to meet the minimum income requirement to qualify.
Can I claim Tax-Free Childcare and free childcare hours together?
Yes, you can claim both. Working parents can use 15 or 30 hours of free childcare each week and still use the Tax-Free Childcare account for extra costs.
How do I apply for Tax-Free Childcare?
You can apply by opening a free account on the official GOV.UK website. Once set up, you can start paying in and the government will automatically top up your account.
