What is tax free childcare?

Tax free childcare (TFC) is a government scheme to help working parents with the cost of their childcare. It is targeted at families with children aged 0-11 or up to 17 if their child has a disability. The scheme can save families up to £2,000 per child per year or £4,000 for a child with a disability.

Tax free childcare isn’t necessarily the right choice for every family and the government recommends using the childcare calculator to work out which scheme will work out best for you.

How does it work?

Parents open an online account and then use this to pay for childcare at a registered provider. The government will top up any money paid into the account, so for every £8 added by parents the government will add an additional £2. Visit gov.uk/tax-free-childcare to find out more.

We have childcare vouchers, can I use these at the same time?

You cannot claim tax free childcare at the same time as childcare vouchers.

NB: Families using the MOD Sodexo childcare scheme should be advised that if they leave the scheme (which has closed to new applicants) they will not be able to re-join.

We have 30 hours of funded childcare for our children under four, can we use TFC as well?

If you are eligible then you can claim the 30 hours of funded care alongside tax free childcare.

Can I use TFC overseas?

Service families can also use their tax free childcare to pay for their childcare in overseas locations with MOD approved childcare providers. For further information about this please read the TFC DIN available on the Defence Intranet.

For detailed guidance on TFC please visit the gov.uk webpage or download the HMRC information flyer.

See also AFFS bites: tax free childcare


POSTED ON 18 APRIL 2022

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