What is the Tax-free Childcare scheme?
The Tax-free Childcare scheme enables eligible parents to receive a contribution from the Government of 20% of their childcare costs, up to an annual limit of £2,000 per child (or in the case of a disabled child up to £4,000). Parents can pay money into a childcare account and have the payments topped up by the Government. For example, for every 80p paid in by parents, the Government will top up the payment in the childcare account by 20p.
Parents can open their own childcare accounts online and the scheme is not led or administered by employers.
Tax-free Childcare is being rolled-out gradually and will be available in relation to all children under 12 (where parents qualify) by the end of March 2018. It is available from 21 April 2017 for parents of a child who is aged under four on 31 August 2017 or of a child who is disabled (aged under 17). From 24 November 2017, Tax-free Childcare will be extended to parents whose youngest child is under six, or whose sixth birthday is on 24 November 2017.