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The government’s Tax-Free Childcare scheme is open to all eligible parents in the UK. If you’re looking for help with childcare costs, this guide will tell you everything you need to know about the scheme.

What is The Tax-Free Childcare Scheme?

Tax-Free Childcare is a government support that helps working parents, including self-employed individuals, with the cost of childcare.

The Benefits of The Scheme

If you use authorised childcare, the government will match £2 for every £8 contributed by parents, up to a maximum of £500 every three months, or £2,000 per child per year, including £4,000 for disabled children.

Here you can find a directory approved childcare centres.

Uses of Tax-Free Childcare

You may put these funds toward lawful childcare expenses such as:

  • Caregivers such as nannies, daycare centres, and preschools.
  • After-school activities and programmes

My child Has a Disability

Extra funds from Tax-Free Childcare can be utilised to cover the following:

  • The cost of care for your child for longer periods.
  • To assist in paying for your childcare provider, acquire adaptive devices, such as mobility aids.

Is Your Childcare Provider EEA-Based?

Sometimes, you can utilise Tax-Free Childcare to compensate a provider located in another European Economic Area (EEA) nation.

Call the child care service helpline to find out more.

Tax-Free Childcare Eligibility

teacher and students drawing on papers

There are four factors you need to think about to determine your tax-free childcare eligibility, such as:

  • If you have a job.
  • Income (if you have a partner, this applies to them too)
  • The age of the child and circumstances
  • Your UK immigration status

If you have a job

The participants (and their spouses or partners) often qualify for tax-free childcare if:

  • You have a job.
  • You are out of the office for medical reasons or on vacation.
  • You are on leave due to childbirth, parenthood, or adoption.

Are You on Adoptive Leave?

You are not eligible to apply for the child you are on adoption leave for unless you plan to return to work between 31 days of the day you submitted your application.

I am Unemployed

You can still qualify if your spouse is employed and receives any of the following:

  • Incapacity Benefit
  • Severe Disablement Allowance
  • Carer’s Allowance
  • Contribution-based Employment
  • Support Allowance

You may apply if you plan to begin or resume employment in the next 31 days.


You and your partner/spouse must meet a minimum income requirement for the following three months. For an average workweek of 16 hours, the National Minimum Wage or Living Wage is set.

Self-Employed Income

If you are self-employed and don’t think you’ll generate enough money in the next three months, you may use an estimate based on your projected earnings for the tax year.

If you’re self-employed and established your company within the last year, you’re exempt from this wage cap.

Adjusted Net Income

Your eligibility will be denied if you or your spouse have an expected “adjusted net income” of more than £100,000 for the current tax year. Include potential bonuses in this estimate.

How to calculate your adjusted net income

Total of taxable income before any personal allowances – less certain tax reliefs = Adjusted net income.

Non-Qualifying Income

The following sources of income will not count toward the minimum amount needed to meet the criteria:

The child

The following must be true of the child for whom you are applying to the scheme:

  • The child must live with you.
  • The child must be 11 or below.

After their 11th birthday, on the 1st of September, they are no longer eligible.

Financial support is available for up to £4,000 a year for disabled children up to the age of 17. They qualify for if:

A) The child receives any of the following:

  • Disability Living Allowance
  • Personal Independence Payment
  • Armed Forces Independence Payment

B) The child has been identified as:

  • Legally blind
  • Severely visually impaired

Your UK immigration status

Tax-Free Childcare requires a National Insurance number and one of the following Immigration prerequisites:

  • British/Irish citizenship
  • You have an application pending and are awaiting a response, or you have settled or pre-settled status.

Do You Live in Another Country?

If you live in the EU, Switzerland, Norway, Iceland, or Liechtenstein, you or your spouse may qualify for Tax-Free Childcare if:

  • Your job is based in the UK.
  • The work began before the 1st of January 2021.
  • You’ve worked in the UK at least once a year.

This is called “frontier work.” When applying for Tax-Free Childcare, the Childcare Service needs your Frontier Worker permit.

Can I utilise more than one scheme?

You are not eligible for Tax-Free Childcare if you already receive Working Tax Credit, Child Tax Credit, Universal Credit, or childcare vouchers. Which scheme is best for you depends on your circumstances. 

Unsure which scheme is best for you? Find out here.

How to apply for a Tax-Free Childcare account

To submit an application for tax-free childcare, you’ll need to go through the government’s website and create an account.

You’ll need to provide some basic information, such as:

  • Your name
  • Address
  • Date of birth
  • National Insurance number
  • UK Passport
  • Tax Credits
  • P60
  • Recent payslip

After you’ve created your Tax-Free Childcare account, you’ll be able to start the application process. The process is relatively simple and shouldn’t take more than five minutes to complete.

Once you’ve completed the application process, you’ll be able to start using tax-free childcare right away.


The Tax-free childcare scheme is a great way to help families with the cost of childcare. It can make a big difference to your family’s budget, and it’s worth considering if you’re eligible.

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