The government’s new tax-free childcare scheme is scheduled to launch on 28 April. This will be available to parents with children under 2 first and will gradually be phased in over the course of 2017.
Eventually the scheme will replace the employer childcare voucher system which will be closed to new users from April 2018.
Working parents with children aged under 12 or under 17 for children with disabilities will be eligible to use the scheme.
To use the scheme, you and your partner (if you have one) must earn at least £120 per week. This includes self-employed parents. Parents can still be eligible if they are on maternity leave, unable to work if are disabled or have caring responsibilities.
Working parents earning £100,000 or more are unable to use the tax-free childcare scheme.
How it works
Eligible parents can visit the government website and set up an online tax-free account. For every £8 you pay in to the account, you will receive a top-up bonus of £2 from the government.
The maximum top up you can receive is £2,000 per child or up to £4,000 for children with disabilities.
The scheme cannot be used in conjunction with childcare vouchers, tax credits or universal credit but it can be used alongside free childcare.
How to apply
Applying for tax-free childcare is done via the government website. As soon as you open an online account you can begin to pay for registered childcare.
The scheme can be used to pay:
- registered nurseries, childminders and nannies
- registered play schemes and after school clubs
- registered schools
- home care workers who work for a registered home care agency.
On top of the new account scheme, working parents in England with children aged 3 and 4 will be able to apply for 30 hours free childcare from September 2017.