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Written by: Jane Preedy, 08 June 2017

Tax Free Childcare blog image

Tax-Free Childcare is a new government scheme to help working parents with the cost of childcare.

It is currently available to all parents with children aged under 9. It will be open to all parents with children aged below 12 by 14 February.

By the end of 2017 it should be available to all parents with children aged under 12, or under 17 for disabled children.

With Tax-Free Childcare, families can open an online Childcare Account for each child to help with their childcare costs. The government will pay 20% of childcare costs up to a maximum of £500 per child every three months (£1,000 for disabled children). So for every £8 parents pay into a Childcare Account, the government will automatically pay in an extra £2. This money must be used to pay for childcare, and can be used to pay a nanny.

To be eligible for Tax-Free Childcare parents must both be in paid work, earning at least an average of £115 a week and not more than £100,000 a year each. The Nanny must be registered with a regulatory body, ie Ofsted, and must also sign up to Tax-Free Childcare.

Tax-Free Childcare is taking over from the current employer-supported Childcare Vouchers and cannot be used in conjunction with them. The current Childcare Voucher scheme will remain open to new entrants until April 2018. Parents using the current Childcare Vouchers can continue to do so for as long as their employer continues to offer the scheme.

Find out more about Tax-Free Childcare here: www.nannytax.co.uk/gov-financial-support/tax-free-childcare.