arrow_upward arrow_upward
Nannypax Activity & Recipe Packs | Tax-Free Childcare | Nannytax

Tax Free Childcare

& other childcare financial support schemes

Tallying up your childcare costs and worried about the expense? You’re not alone. Find out how nanny employers can benefit from childcare support schemes such as Tax-Free Childcare, Universal Credit and 15/30 hours Free Childcare.

Tax-Free Childcare for Nannies

You can use the Tax-Free Childcare scheme to pay for many different types of childcare including Ofsted registered nannies, childminders, and nurseries.

Once signed up you will have access to an online platform to manage the payments. For every £8 you pay into your Tax-Free childcare account, the Government will top it up by an extra £2 (up to a cap of £2,000 per child, per year).

In addition to this, if you’re using Tax-Free childcare with a nanny, you can use the money in your Tax-Free childcare account to pay HMRC too.

Who is eligible?

To be eligible for this scheme you must:

  • Have a child living with you.
  • Have a child under 12, or under 17 if disabled.
  • Be in paid work (both parents/carers or the single parent). Working includes both employed or self-employed with an expected income of at least £152 a week on average.
  • Earn less than £100K (either parent/carer).
  • Not be receiving other government support towards the cost of childcare (i.e. Childcare Vouchers, Tax Credits, Universal Credit, Student Bursary, etc)

How to Apply

To check your eligibility and apply for the Tax Free Childcare scheme, simply visit .Gov website below.

Universal Credit for Childcare

The Universal Credit Scheme has been introduced as a replacement for the previous Tax Credits Scheme. If you are eligible for this scheme you may be able to claim up to 85% of eligible childcare costs, up to a cap of £646 per month (for one child) or £1,108 (for two or more children).

If eligible, you can use your Universal Credit for Childcare to help pay towards the cost of Ofsted registered nannies, childminders, and nurseries.

Who is eligible?

To be eligible for the Universal Credit for Childcare scheme, both you and your partner must be either in work, due to start work, or claiming universal credit.

How to Apply

The amount you can claim through this scheme is dependent on your location and personal circumstances. Find out how to claim Universal Credit for your nanny below.

Childcare Vouchers

Whilst the Childcare Voucher Scheme has now closed to new applicants, some families may still be in receipt of these. You can use Childcare Vouchers to pay for many different types of childcare, including Ofsted registered nannies, childminders, and nurseries.

Childcare Vouchers are made up as a portion of your gross salary and are taken as a salary sacrifice. This means that you will pay less tax than usual as you won’t have to pay tax on the voucher.

If you are a Nannytax Plus customer please contact Nannytax about your use of Childcare Vouchers. If you have a subscription with our standard Nannytax payroll service this won’t be necessary.

You can use the Tax-Free Childcare scheme to pay for many different types of childcare, including Ofsted registered nannies.

Tax Credits for Childcare

The Tax Credits for childcare scheme has now closed to new applicants, however, existing tax credit customers may be eligible to claim back up to 70% of eligible childcare costs (depending on income).

15/30 Hours free Childcare

Families who live in England may be eligible for the Governments 15/30 hours free childcare scheme. This scheme is open to working parents earning below £100,000 per annum. You can utilise 15/30 hours of free childcare for nursery fees, schools, childminders and after-school clubs.

For more information on the 15/30 Hours Free Childcare Scheme criteria please visit the Government’s Childcare Choices website or read more about recent changes here.

Similar schemes are also available for Scotland, Wales and Northern Ireland.

Nannytax and Childcare Support Schemes

Many of our Nannytax customers use Tax-Free Childcare and we recommend using the Childcare Choices website to help set yourself up. Our subscriptions team can then advise you on how your payroll can run alongside Tax-Free Childcare seamlessly. Speak to a member of our friendly team today or alternatively get going straight away and set up your nanny payroll now.

You might also be interested in

Tax & National Insurance

If you are employed you must pay Tax and National Insurance (NI) on your earnings, however, legally it falls to the employer to ensure these deductions are made.

Gross vs Net

If you agree a Net salary you may be in for a shock further down the line when faced with how much employing your nanny is really going to cost. That’s why we advocate the #GOGROSS campaign.

Rates & Thresholds

The current Government rates for the tax year 2020 – 2021 came into effect on the 6th April 2020. Please see our Rates and Thresholds page for the latest Tax and National Insurance rates.