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Tax Free Childcare & 30 Free Hours

Posted May 11th 2017

Tax-Free Childcare and 30 hours free childcare are two new separate government schemes, to help parents with the cost of childcare. Both schemes can be applied for through a single online application – the childcare service.

To qualify for either scheme, parents must be working and each earning at least £120 a week (on average) and not more than £100,000 each a year.

Parents can use Tax-Free Childcare alongside the 15 and 30 hours free childcare schemes in England, or any free childcare hours provided by the Scottish, Welsh or Northern Ireland governments.

Parents can't use Tax-Free Childcare at the same time as they receive childcare vouchers, Universal Credit or tax credits. However, 30 hours free childcare can be received alongside these schemes.

Tax-Free Childcare

Parents will be able to open a new childcare account. For every £8 a parent pays into their childcare account, the government will pay in an extra £2. Parents can get up to £2,000 government support per child per year towards their childcare costs. They can then use this money to pay their childcare provider.

Parents will be able to apply for Tax-Free Childcare from early 2017, when the government will begin inviting parents to apply, starting with parents of the youngest children first.

Parents will only be able to pay their childcare provider from their childcare account if their childcare provider is signed up to Tax-Free Childcare.

What you need to know:

  • You can’t claim tax credits and Tax-Free childcare at the same time.  If you apply for Tax-Free Childcare and are successful, your tax credits claim will be stopped.  You’ll be asked about this as part of the application.
  • You can’t claim Universal credit and Tax-Free childcare at the same time.  If you apply for Tax-Free Childcare and are successful, you’ll need to stop your Universal Credit claim.  You should apply for Tax-Free Childcare before you do this, so you know whether you’re eligible.
  • You can still get tax credits or Universal Credit at the same time as 3 and 4 yeal old extended free entitlement.

You're usually eligible if all of the following apply:

Your child:

  • is under 12, or 17 if they're registered as having a disability
  • usually lives with you

You (and your partner, if you have one):

  • are 16 or over
  • live or work in the UK
  • are employed or self-employed
  • are over 21 and earn on average at least £120 a week, unless in your first year of self-employment. Different rates apply if you're under 21 or an apprentice.
  • earn less than £100,000 a year each
  • don't get other support with your childcare, including from a childcare voucher or salary sacrifice scheme

You may also be eligible if you have a partner and one of you gets any of the following benefits:

  • Carers Allowance
  • Employment and Support Allowance
  • Incapacity Benefit
  • Severe Disablement Benefit

30 hours free childcare

3 and 4 year old extended free entitlement will support parents to get back into work, or to work more hours.  It’s available to eligible working parents of 3 and 4 year olds in England.  If you’re eligible, you can get an additional 15 hours free childcare, each week for 38 weeks of the year.

All 3 and 4-year-olds in England already get 15 hours a week, or 570 hours a year of free early education. If their parents are living and working in England, 3 and 4-year-olds may be entitled to 30 hours free childcare. An extra 570 hours of free childcare a year, so 1140 hours in total. 30 hours free childcare will be available from September 2017.

The eligibility criteria are the same as the ones for Tax-Free Childcare, except you can continue to get these types of support at the same time as 30 hours free childcare:

  • tax credits
  • Universal Credit
  • childcare vouchers or salary sacrifice schemes
  • childcare grants and bursaries

When you apply, you'll be confirming that you need childcare so that you and your partner, if you have one, can work. If your child's already in a full-time reception class in a state funded school, you won't be eligible for 30 hours free childcare.