Tax-Free Childcare

From April 2018, childcare voucher schemes will be closed for new applicants.

Employees who are already in a scheme will be eligible to keep receiving vouchers, but they will not be able to re-join the scheme if they leave, nor will they be able to join a new scheme should they change jobs.

The childcare voucher scheme is being replaced by Tax Free Childcare.

Under this scheme, eligible parents will have to open a childcare account.

For every £8 a parent pays into their childcare account, the government will pay in an extra £2.

Parents can get up to £2000 government support per child per year towards their childcare costs, £4,000 for a disabled child.

Parents will only be able to pay their childcare provider from their childcare account if their childcare provider is signed up to Tax-Free Childcare.

Parents will usually be eligible if they:

• are aged 16 or over
• live or work in the UK
• are employed or self-employed
• are over 21 and earn on average at least £120 a week, unless in the first year of self-employment.
• earn less than £100,000 a year each
• don’t get other support with childcare, including from a childcare voucher or salary sacrifice scheme

In addition, their child:

• must be under 12, or 17 if they’re registered as having a disability
• usually lives with them
• adopted children are eligible, but foster children are not.