Tax-free childcare is an online account where for every £8 you pay in, the Government adds in £2. The money must be spent on childcare costs
Parents could be missing out on tax-free childcare worth up to £2,000 a year – and you can use this help during the summer holiday.
Tax-free childcare is an online account where for every £8 you pay in, the Government adds in £2. The money must be spent on childcare costs.
If you’re eligible, you can get up to £500 every three months – so £2,000 a year – for each of your children. For disabled children, the maximum amount is £1,000 every three months (£4,000 a year).
You can open a tax-free childcare account for free and the GOV.UK website says it takes around 20 minutes to apply. Your child must be aged 11 or under and usually will need to live with you to claim tax-free childcare.
You can keep using your tax-free childcare account until September 1 after their 11th birthday, or if your child is disabled, they may qualify until September 1 after their 16th birthday.
You need to be earning at least the minimum wage, for the equivalent of 16 hours a week, to open a tax-free childcare account. You won’t be eligible if your adjusted net income is above £100,000. This applies to yourself and your partner, if you’re in a couple.
If you’ve been self-employed for less than 12 months, there is no minimum income requirement. There are some circumstances where you can claim tax-free childcare if you’re not working.
For example, if you’re on sick leave, annual leave, on shared parental, maternity, paternity or adoption leave, or if you’re in a couple and one of you is working, and the other claims Incapacity Benefit, Severe Disablement Allowance, Carer’s Allowance or contribution-based Employment and Support Allowance.
The money in your tax-free childcare account must be spent on a registered childcare provider, such as nurseries, nannies, after school clubs and play schemes.
But not everyone necessarily needs to pay for childcare in the first place. For example, parents can claim 15 or 30 hours free childcare a week, depending on the age of their child.
Working parents of nine-month-olds and two-year-olds can currently access 15 hours of free childcare a week. This will rise to 30 hours from September 2025.
You must be in work and earning the equivalent of the national minimum wage or for 16 hours a week, but have an adjusted net income of £100,000 a year.
All parents of three and four-year-olds are entitled to 15 hours free childcare a week as standard, regardless of whether they are in work.
Working parents with children of these ages can claim the full 30 hours if they meet the earnings criteria. You can claim tax-free childcare on top of the 30 hours free childcare.
Finally, if you claim Universal Credit and you’re in work, you can claim back up to 85% of childcare costs, up to a maximum of £1,031.88 for one child or £1,768.94 for two or more children.
