Tax-Free Childcare

What is Tax-Free Childcare?     

Tax-Free Childcare is a government scheme for working families, including the self-employed, in the UK with children aged 0-11 (or 0-16 if disabled).

The scheme allows families to set up an online childcare account to pay their registered provider directly. For every £8 they pay into this account, the government will pay in £2. The total amount in the account can only be spent on childcare. Parents can receive up to £2,000 in government support per child, per year, or £4,000 for disabled children. More information about how it works.

As a childcare provider you need to have signed up for Tax-Free Childcare to be able to receive payments from any of your families through the scheme. 

How long will it take for payments to go through?    

The government top-up is added into the parent’s online account on the same day, and the total amount will be available to pay for childcare.    

The accounts use the Bacs system, so payment should only take two to three working days to arrive in your bank account. When you receive a payment from a parent, it will include both their payment and the government contribution.    

Are my families eligible? 

Parents could be eligible for Tax-Free Childcare if they:

• Expect to earn on average at least a weekly amount equivalent to 16 hours a week at the National Minimum Wage or National Living Wage over the next three months
• Don’t receive childcare vouchers, tax credits or Universal Credit
• And have children who are under 12, or under 17 for disabled children  
• Not have adjusted net income of £100,000 per year (this is taken from the Best start in life website).  

While parents can’t use Tax-Free Childcare at the same time as childcare vouchers, childcare providers who are signed up to Tax-Free Childcare can receive payments from both schemes.

How do childcare professionals sign up?   

It’s very simple to sign up. You should have received a letter from the government containing your unique ID which you will need to start the online process. Once you are in the secure site you will need to:   

• Confirm your unique taxpayer reference (UTR) number. You can find this on previous tax returns or other communications from HM Revenue and Customs; or your National Insurance number, if you are a nanny and don’t have a UTR.
• Provide bank details for the account you wish to receive Tax-Free Childcare payments into.

Want to know more? 

• Find out how to sign up to Tax-Free Childcare

This page was last updated on 23 September 2025