Tax-Free Childcare

Make your childcare budget go further

Tax-Free Childcare helps eligible working families reduce their childcare costs. For every £8 you pay into your childcare account, the government adds £2, helping your budget stretch further.

How Tax-Free Childcare works

You pay money into an online childcare account, and the government automatically tops it up.

For every £8 you pay in, £2 is added, giving you up to £2,000 per child each year, capped at £500 every three months. For a disabled child, the maximum top-up increases to £4,000 per year.

In practical terms, if your childcare bill is £400, you would pay £320 into your account and the government would add the remaining £80.

Are you eligible?

Eligibility is based on your circumstances and expected earnings over a three-month period. If you have a partner, you will normally both need to meet the relevant criteria.

Work and earnings

You usually need to expect to earn at least the equivalent of 16 hours a week at the National Minimum or Living Wage over the next three months. You may still qualify if you work variable or zero-hours contracts, provided your average earnings meet the threshold.

Income

Neither parent can have an adjusted net income of more than £100,000 in the current tax year.

Maternity and parental leave

You can still count as working while on sick leave or parental leave. For a child you are currently on leave for, you can usually open the account up to 31 days before returning to work.

Age and self-employment

Your child must usually be 11 or under, with support continuing until the September after their 11th birthday. Newly self-employed parents are not subject to the minimum earnings rule during their first 12 months.

Tax-Free Childcare and childcare vouchers

The Employer Childcare Voucher scheme closed to new applicants in 2018, although some families continue to use legacy vouchers.

You cannot use Tax-Free Childcare and Employer Childcare Vouchers at the same time. Tax-Free Childcare works per child rather than per parent, is available to eligible self-employed parents and can provide up to £2,000 of government support per child each year. Kids Planet accepts payments through both legacy childcare vouchers and Tax-Free Childcare accounts.

Can I use it with funded childcare?

Yes. Tax-Free Childcare can be used alongside government-funded childcare.

Your funded hours may not cover all of your childcare costs, so Tax-Free Childcare can be used towards eligible remaining fees and additional childcare.

At Kids Planet, funded hours may be stretched across the year to provide a more consistent monthly pattern, depending on your childcare arrangement. Where you still have a balance to pay, Tax-Free Childcare can help reduce the amount you need to fund yourself.

Can I use it with Universal Credits?

No. If you receive Universal Credit childcare support, you cannot also claim Tax-Free Childcare. The two types of childcare support cannot be claimed at the same time.

Read the GOV.UK guidance on Tax-Free Childcare and Universal Credit

Paying Kids Planet with Tax-Free Childcare

  1. Check your eligibility

    Apply for a Tax-Free Childcare account through the government’s childcare service.

  2. Add money to your account

    Check your invoice in Famly and pay the required amount into your account. The government will add its contribution.

  3. Find your nursery

    Search for your Kids Planet nursery using its postcode or Ofsted URN. Your nursery team can help if needed.

  4. Send your payment

    Pay your nursery and provide your child’s unique reference code so we can allocate it correctly. Payments can take up to three working days to appear.

To keep receiving the government top-up, you need to reconfirm your details through your GOV.UK childcare account every three months. The government will usually remind you when this is due, but it’s worth keeping track of the date so your support continues without interruption

Need help with childcare funding?

Our nursery teams are here to help you understand your funding options and how they can work for your family. Find your nearest nursery and get in touch.

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