The new £2,000 Tax Free Childcare Scheme

The new scheme sees the Government contributing 20p for every 80p that working parents spend on childcare costs each year.

This is the equivalent of the 20% tax many people pay on their earnings – hence the name “tax free”.

It will offer as many as 2 million working families in the UK up to £2,000 per year for each child under 12 or £4,000 for disabled children (to the age of 17.)

To begin with, the scheme will focus on parents with the youngest children (two and under) but will be rolled out to all by the end of 2017.

To qualify parents will have to:
• Be employed (you can be on maternity; paternity or adoption leave)
• Both adults must be earning at least £115 a week and not more than £100,000 each year
• Live in England

Tax free childcare will replace childcare vouchers.

Childcare voucher schemes will close to new entrants from April 2018.

Parents must express their interest online by pre-registering on the following website:

The application will be reviewed and once approved parents will be able to open an account online, provided by NS&I.

Parents then pay into this account which is then topped up by the Government for the purpose of childcare costs.

The top-up is added instantly and parents can then send electronic payments to their child care providers.