40 Years of Busy Bees

Your Guide to Tax-Free Childcare and Childcare Vouchers

As Busy Bees is Ofsted registered, we can accept Tax-Free childcare to pay for childcare.

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Tax-Free childcare can be an excellent option for parents, but we understand that it can feel complicated to set up and use them to pay for your childcare costs.

Note also that we accept Childcare Vouchers, although they are no longer offered to new employees, so if you have started a new position from 2018, this option will not be available.

As the UK's leading childcare and nursery provider, we do all we can to give your child the very best start in life and make your life easier. So, if you find the subject of Tax-free childcare a little tricky, we will do our very best to help.

You can always speak to your centre director about the hours and funding you need.

What is Tax-Free Childcare?

Tax-Free childcare is a government scheme to support working parents with their childcare costs, offering up to £2,000 per child per year (or £4,000 for children with disabilities), depending on eligibility.

Parents who receive Tax-Free childcare cannot claim childcare tax credit or universal credit.

Tax-Free childcare is available to the following:

  • Families with children aged 0-11 (or 0-16 if disabled)
  • Working families in the UK
  • Those who are not receiving Childcare Vouchers, Universal Credit or Tax Credits
  • Those earning at least the National Minimum or Living Wage equal to 16 hours a week, or under £100,000 p.a.

Visit the Government's Childcare Choices website https://www.childcarechoices.gov.uk/ to find out more.

How does Tax-Free Childcare work?

You set up an online childcare account for your child. For every £8 you pay into this account, the government will pay in an extra £2, effectively giving you 20% additional funds - or the basic rate of tax back - on what you spend through your online childcare account.

You can then use the money to pay your childcare costs.

You will need to reconfirm your eligibility for Tax-Free Childcare every three months. You'll receive a reminder via text message and it's ever so easy to do through your online childcare account.

Am I eligible for Tax-Free Childcare?

To get Tax-Free Childcare, you need to be working at least 16 hours a week, earning at least the National Minimum Wage or National Living Wage.

This includes being:

  • self-employed
  • on maternity or parental leave
  • on sick leave or annual leave

Your child is eligible until the September after their 11th birthday, or until their 17th birthday if they have a disability.

Each parent or carer can earn up to £100,000 per year and still be eligible for Tax-Free Childcare. Your eligibility doesn't depend on how much tax you pay, so it will not affect your income tax liability or any other tax, such as VAT.

You can't claim Tax-Free Childcare at the same time as Working Tax Credit, Child Tax Credit or Universal Credit.

Northern Ireland residents

If you live and pay tax in Northern Ireland but use a childcare provider in the Republic of Ireland, please call 0300 123 4097 to check your eligibility.

If you live in Northern Ireland but work in the Republic of Ireland, you're eligible for Tax-Free Childcare if you or your partner pay UK tax and complete an annual Self-Assessment tax return and foreign income page.

Find out more about your childcare funding options

To find out how much you could get towards your childcare costs and check whether you're eligible, visit www.childcarechoices.gov.uk

What about other funded childcare options?

Depending on where you live in the UK, there are additional funded childcare options available too. England offers 15 and 30 hours of funded childcare, Scotland offers 1140 hours of funded childcare and Wales offers Early Education and Childcare Offer of up to 30hrs per week.

Visit our Funded Options page to find out more about eligibility and any terms that may apply around these options.