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Initial launch of Tax-Free Childcare Scheme

Source: Department for Education | | 26/04/2017

The new Tax-Free Childcare Scheme (TFCS) is now available to the first tranche of working parents. The scheme has initially been made available to working parents of children that will be aged under 4 on 31 August 2017. 

Qualifying parents can now apply through the new digital childcare service for TFCS and receive a government top-up of £2 for every £8 that they pay into their Tax-Free Childcare account up to a maximum contribution of £10,000 per child per year. The new www.childcarechoices.gov.uk website provides further information on signing up.

This will give parents an annual savings of up to £2,000 per child in childcare costs and is expected to be available for all qualifying children under the age of 12 by the end of this year. Parents will be able to have one childcare account for each qualifying child.

The new scheme is open to all qualifying working parents including the self-employed. The scheme is also available to parents on paid sick leave and paid and unpaid statutory maternity, paternity and adoption leave. In order to be eligible to use the scheme parents will have to be in work, and each earning just over an average of £100 a week and not more than £100,000 each per year.

There will be extra benefits of up to £4,000 per year for disabled children until the age of 17. The application process is also open to all parents of disabled children. Parents already registered to use employer-supported childcare will be free to continue using their existing arrangements for as long as their employer offers it. For some high earners and those with older children, the employer-supported childcare scheme may be more beneficial.

In addition, from September this year parents of three and four year old children living in England will be able to apply for a new 30 hours free childcare offer, worth around £5,000 per child. The application for free childcare and the TFCS can be made concurrently when a child becomes eligible.


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