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Tax-Free Childcare: Save on Childcare Costs with Government Support

We know that childcare costs can be one of the biggest expenses for working families with young children, but there is support available, such as the Tax-Free Childcare scheme and funded childcare hours.

With these government schemes, families can save a substantial amount of money on childcare costs – it’s a fantastic way to support your family while accessing the high-quality childcare your child deserves.

What is Tax Free Childcare?

Tax-Free Childcare supports eligible families by covering 20% of their childcare costs. For every £8 that is paid into your online childcare account, the government adds an additional £2 (to a maximum of £500 within a 3 month entitlement period) – this can save families up to a total of £2,000 per child per year, or up to £4,000 for children with disabilities. This can then be used to pay registered childcare providers directly, such as nurseries, childminders, play schemes and after-school clubs.

The Tax-Free Childcare scheme is one of many government support options available to help families, and you can find out more about these options on the Childcare Choices website.

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Who is eligible?

To use Tax-Free Childcare, you must meet the following criteria:

You and your partner (if applicable) must be working (employed or self-employed).
You must earn at least the National Minimum or Living Wage for an average of 16 hours per week, but no more than £100,000 per year.
You must not be claiming Universal Credit, Tax Credits, or childcare vouchers at the same time.
Your child must be aged 0-11 years(or up to 16 for children with disabilities).
You’ll need a valid National Insurance number to apply.

Eligibility can also extend during periods such as adoption leave, maternity/paternity leave or if you’re going back to work within 31 days of the date you first applied.

If you’re not currently working, you may still be eligible, provided your partner is employed and you receive one or more of the following:

Incapacity Benefit
Severe Disablement Allowance
Carer’s Allowance or (in Scotland only) Carer Support Payment
Contribution-based Employment and Support Allowance

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How Tax-Free Childcare works and how to apply

Using Tax-Free childcare is an easy process, simply:

Visit the GOV.UK website and apply for Tax-Free Childcare. The application takes approximately 20 minutes.
Create your online childcare account and add your child’s details.
For children not born in the United Kingdom, you may be required to send their documents to be verified. You will be notified of this during the application process.
Start making payments into your online account – you can contribute as much or as little as you like, whenever it suits you.
Receive the 20% government top-up automatically, which can be used to pay any registered childcare provider. Your total available top-up for the entitlement period will be visible on your childcare account.
Reconfirm your eligibility every three months to continue receiving the government top-up, – reminders will be sent to help you stay on track. This is an easy and quick process.

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Frequently Asked Questions

Can I use Tax-Free Childcare alongside other government funding?

Yes, Tax Free Childcare can be used alongside other Government funding, such as 15 and 30-hour free childcare. However, you cannot use it with Tax credits, Universal Credit or childcare vouchers at the same time.

Which childcare providers accept Tax-Free Childcare?

All registered childcare providers, including Grandir UK nurseries, after-school clubs and childminders, accept Tax-Free childcare.

What happens if I have more than one child?

If you have more than one child, don’t worry – you’ll receive the same 20% top-up for each child separately (even if you use the same account).

When will the government top-up appear in my online childcare account?

The 20% government top-up is usually added very quickly, often within a few hours of your payment, but on rare occasions it can take up to 24 hours. Once the funds are in your account, you can use them straight away to pay your registered childcare provider.

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What if my circumstances change after I apply?

If your circumstances change, it’s important to update your account. Every three months, you’ll be asked to reconfirm your eligibility so you can update your details then, or log into your account and make changes at any time.

Can I use Tax-Free Childcare if my child and/or I am not a British citizen?

Yes. As long as you are a permanent resident in the UK and meet the eligibility requirements, you will be able to make use of the Tax-Free childcare. If your child was not born in the UK, you may be asked to provide additional documentation to verify them during the process of setting up your account.

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Ready to get started?

Whether your child attends nursery full-time, takes part in after-school clubs, or is cared for by a childminder, Tax-Free Childcare support can make a real difference.

Start saving money on childcare costs today by applying for the scheme here. It’s one of the best ways to make quality childcare more affordable.

All Grandir UK nurseries accept Tax-Free Childcare, along with a range of other government funding schemes such as the 15-Hour and 30-Hour Funding options. We are committed to making high-quality childcare accessible and affordable for every family.