Government launches Tax-Free Childcare scheme

28 Apr 2017

The government has launched its Tax-Free Childcare scheme, which is designed to help parents with the cost of childcare.

Under the new initiative, tax relief worth 20% is available for use against the costs of childcare, up to a total of £10,000. The scheme is therefore worth up to £2,000 per child, or £4,000 for a disabled child.

Tax-Free Childcare applies to children aged under 12, or up to 17 for those with disabilities.

Parents are able to create online accounts, into which they can contribute money to pay for childcare. By the end of the year, eligible parents will be able to receive government ‘top ups’ of £2 for every £8 that a parent pays into the account.

Commenting on the Tax-Free Childcare initiative, David Gauke, Chief Secretary to the Treasury, said: ‘This government is on the side of working families and our childcare support will cut thousands of pounds off bills for millions of households, as well as supporting parents to return to or remain in work.

‘The new Childcare Choices website provides busy families with options that suit their needs, so they can clearly see which childcare offer works best for them.’

The Childcare Choices website can be found here.

In addition to Tax-Free Childcare, from September, working parents of three and four-year-olds living in England will be able to apply for 30 hours of free childcare, worth around £5,000 per child.