Tax-Free Childcare: Top things childcare providers should know

Overview

Tax-Free Childcare is a new government scheme to help working parents with the cost of childcare.

Parents of the youngest children can now open an online account, which they can use to pay for childcare from a registered provider.

For every £8 a parent pays in, the government will pay in an extra £2. Parents can receive up to £2,000 per child, per year, towards their childcare costs, or £4,000 for disabled children.

The scheme will be available for children under the age of 12, or under 17 for children with disabilities.

To qualify, parents will have to be in work, and each expecting to earn at least £120 a week. Each parent must not have income over £100,000 per year.

Tax-Free Childcare scheme launch to parents

Tax-Free Childcare will be introduced on 21 April 2017 and will then be gradually rolled out over 2017, with parents of children aged under four (on 31 August), and parents of disabled children (aged under 17) able to enter the scheme first.

Parents will be able to apply for all their children at the same time, when their youngest child becomes eligible. All eligible parents will be able to join the scheme by the end of 2017.

Childcare Providers

Use the information below to get ready to sign up to Tax-Free Childcare.

You’ll need to sign up to receive payments from parents

Throughout September and October 2016, letters were sent to regulated and approved childcare providers across the UK, asking you to sign up online for Tax-Free Childcare. Further letters are being sent out to all registered childcare providers who have yet to sign up, ahead of Tax-Free Childcare being introduced to parents.

You must be a regulated or approved childcare provider to receive Tax-Free Childcare

Only childcare providers registered with a regulator can receive Tax-Free Childcare payments.

To register with a regulator can take up to 12 weeks. If you aren’t, do so now, so that your customers can pay you using Tax-Free Childcare. For registration timelines, please check the appropriate regulator’s website.

Check that your regulator has your current address

You’ll only receive an invitation to sign up for Tax-Free Childcare if your regulator has your current address, so check that this is up to date.

Please also make sure your regulator has your current email address as this will help us if we need to contact you.

If your regulator does have your current address but you haven’t received your invitation, you can call the childcare service helpline on 0300 123 4097.

Be ready for Tax-Free Childcare

If you’re running a business, you’ll need your 10-digit Unique Tax Reference (UTR) number to sign up for Tax-Free Childcare. This is the number that HM Revenue and Customs (HMRC) gave you when you first told HMRC that you were working for yourself.

You can find your UTR on any HMRC communications, for example, your tax statement or payment reminder, or by logging onto your Personal Tax Account.

If you can’t find your UTR number, HMRC can send this number to your address. For more information, call the childcare service helpline on 0300 123 4097.

If you’re a nanny, you’ll need your National Insurance number to sign up for Tax-Free Childcare. You can find this on your payslip, P60, or letters from HMRC about tax, pensions and benefits.

Making Tax-Free Childcare payments will be easy

When you signup, you’ll need to give us your bank details. Parents will then be able to send you payments directly from their Tax-Free Childcare accounts to your bank account (via BACS).

Each child will have a Tax-Free Childcare reference number. Parents can let you know their reference number to help you identify their payments.

Find out about the wider government childcare offer

Visit the Childcare Choices website for the latest on Tax-Free Childcare and the wider government childcare offer.