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Tax-Free Childcare: Your Guide to Saving on Nursery Costs

Home / Childcare Funding / Tax-Free Childcare: Your Guide to Saving on Nursery Costs

What is Tax-Free Childcare?

Tax-Free Childcare (TFC) is a valuable government scheme aimed at helping working parents with the cost of childcare, including nursery fees and out-of-school care. Eligible for families with children up to 11 years old, and up to 17 years for children with disabilities, TFC offers significant financial support:

  • Up to £2,000 per child per year
  • Up to £4,000 per year for children with disabilities

How does Tax-Free Childcare work?

For every £8 you contribute to your TFC account, the government adds £2, offering up to £2,000 per child annually. To qualify, each parent needs to earn a minimum equivalent to 16 hours a week at the national minimum wage but less than £100,000 annually.

Applying for Childcare Funding

Apply for Tax-Free Childcare.

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Tax-Free Childcare FAQ

How much is Tax-Free Childcare?

For every £8 deposited, the government contributes £2, turning an £800 contribution into £1,000 in childcare funds. The maximum you can earn from the scheme per year is £2000 per child of £4000 per child with a disability.

Can I combine Tax-Free Childcare with other funding?

Yes, if you are eligible for 15/30 hours childcare funding, you can use this alongside Tax-Free Childcare.

Can I use Tax-Free Childcare with Childcare Vouchers or Universal Credit?

Tax-Free Childcare cannot be used in conjunction with childcare vouchers or Universal Credit.

How do I make payments with Tax-Free Childcare?

Once you’ve applied online, you’ll pay 80% of your childcare fees into your TFC account. You will need to locate your nursery within the TFC account and set up a standing order for the funds to be sent directly to your nursery each month.

How do I Set Up Tax-Free Childcare with my Nursery?

After applying, simply provide your Tax-Free Childcare reference number to your selected nursery and they will link it to your child’s profile to match any payments received.

Can I apply for more than one child?

Yes, if you have more than one child, you will need to create a TFC account for each child.

What age children can I claim Tax-Free Childcare for?

Children are eligible for Tax-Free Childcare until the 1st of September following their 11th birthday.