In 2017 the Tax-Free Childcare scheme will be rolled out with the aim of all eligible parents joining the scheme by the end of 2017.
The scheme is available for children up to the age of 12 (or 17 for children with disabilities). For every £8 a parent pays into their childcare account, the government will pay in an extra £2. Parents can get up to £2,000 government support per child per year (or £4,000 if the child is disabled) towards their childcare costs and use this money to pay their childcare provider.
Parents can't use Tax-Free Childcare at the same time as they receive childcare vouchers, Universal Credit or tax credits. However, in England parents can use Tax-Free Childcare alongside the 15 and 30 hours free childcare schemes. Parents are able to check whether Tax-Free Childcare is the best offer for them using the childcare calculator.
Please note: Parents are able to pay their childcare provider from their childcare account only if their childcare provider is signed up to Tax-Free Childcare.
Signing up to receive payments via parent Tax-Free Childcare accounts
Childcare providers must sign up to be able to receive payments from parents through the scheme.
To sign up, childcare providers will need:
- Their 10-digit Unique Tax Reference (UTR) (maintained schools can access this by contacting Lindsay Jackson in the Education Business Support Team).
- Their school/business bank account details for payments to be paid into.
If you have any problems with this process you can call the Government's childcare service helpline on 0300 123 4097.
Once signed up, providers will appear on a new digital tool which lets parents search for childcare providers who can be paid using Tax-Free Childcare.
When registering to pay via the Tax-Free Childcare scheme, we recommend you ask parents for their child's Tax-Free Childcare reference number to help you identify their payments.