North Lincolnshire Council

Tax Free Childcare

What is Tax Free Childcare?

For every £8 a parent pays in, the Government will pay in an extra £2.

Parents can receive:

  • up to £2,000 per child, per year, towards their childcare costs
  • or £4,000 for disabled children, separate from funded entitlements

The offer will be available for children up to the age of 12, or 17 for children who are disabled.

To qualify, both parents will have to be in work, and each expecting to earn at least £120 a week and not more than £100,000 each year.

Parents will be able to open an online childcare account, which they will use to pay for their childcare directly.

Tax-Free Childcare is currently available for children under five years of age. It will gradually be rolled out throughout 2017, with the parents of children under two years of age invited to join the scheme first. Parents will be able to apply for all their children at the same time, when their youngest child becomes eligible.

Tax-Free Childcare can be used to pay for:

  • pre-schools and day nurseries
  • registered childminders
  • school based care (that is paid for, such as after-school clubs)

Parents can’t claim Tax-Free Childcare at the same time as claiming tax credits, Universal Credit or childcare vouchers. Childcare providers can receive payments from both Tax-Free Childcare and childcare vouchers.

Childcare Choices have produced a Top things for parents toolkit [PDF, 356Kb] to support you with applying for 30 hours childcare and tax free childcare.

Childcare providers can sign up now to receive payments via Tax-Free Childcare.

You must sign up for Tax Free Childcare in order to receive payments from parents through the scheme.

To sign up, registered childcare providers should visit the childcare tax service website.  You will need:

  • the unique code included in your invitation letter
  • your business bank account details for the account you wish to receive payments into
  • your business Unique Taxpayer Reference (UTR) number, or your National Insurance number if you don’t have a UTR

If you have mislaid the letter or have any queries you should call the HMRC’s helpline on 0300 123 4097. HMRC have written to registered charities to provide their UTR. If you haven’t received this please phone the helpline number.

Parents can search for childcare providers that have signed up using an online tool. Payments will be made directly from a parent’s online account and will automatically include the Government’s contribution. It will arrive in one simple transaction for childcare providers.

For more information please see the following:

Childcare Choices have produced a Top things for providers toolkit [PDF, 340Kb]. This document explains what providers need to know about tax free childcare.

If you require any support or have any questions on Tax-Free Childcare please contact HMRC at tax-free.childcaremailbox@hmrc.gsi.gov.uk.