Big Changes, Big Choices.

Tax-Free Childcare or Childcare Vouchers?

Which scheme will save you more on childcare costs?


Tax-Free Childcare FAQs

All you need to know about Tax-Free Childcare

Our Family Benefits Advisors have compiled a list of the most frequently asked questions about the new Tax-Free Childcare scheme. You can find the answers to these questions below.

Alternatively you can download Big Changes, Big Choices – our guide to Tax-Free Childcare and how it compares to other forms of support with childcare costs. This guide continues to be updated as Tax-Free Childcare rolls out. In addition, as a starting point you can try our Childcare cost savings calculator to help determine if you will be better off on Childcare Vouchers or the Tax-Free Childcare scheme.

It can be complicated working out what is best for your family, depending on your own personal circumstances. Call 0800 028 3008 or email hello@employersforchildcare.org for free, confidential and impartial advice.

Frequently Asked Questions

  • What is Tax-Free Childcare?

    Tax-Free Childcare allows eligible working families to claim 20% of their childcare costs, up to £2,000 per child per year (or £4,000 for a child with a disability), from the Government.

    It was first announced in the 2013 Budget as part of Government measures to help families with the cost of childcare. From 24 November 2017 the scheme is available to parents whose youngest child is under 6 or who has their sixth birthday on that day, and parents of children aged under 17 who have a disability. It is being gradually rolled out to other families and by the end of March 2018 all eligible parents should be able to access the scheme.

    To learn more, download Big Changes, Big Choices – our Tax-Free Childcare guide (by clicking on the ‘Download our guide’ link at the top of this page), or contact our Family Benefits Advice Service on 0800 028 3008 for advice on your own personal circumstances.

  • What is the difference between Tax-Free Childcare and Childcare Vouchers?

    Chris outlines the key differences between Tax-Free Childcare and Childcare Vouchers.

  • Who is eligible for the Tax-Free Childcare scheme?

    At a glance:

    • Both parents, or one parent in a single-parent household, must be in employment, earning between £120 per week and £100,000 per year.
    • Self-employed parents are eligible to join.
    • Can be used to pay for childcare for children under the age of 12 (under age 17 for
      children with a disability).

    To learn more, download Big Changes, Big Choices – our Tax-Free Childcare guide (from the ‘download our guide’ link at the top of this page), or contact our Family Benefits Advice Service on 0800 028 3008 to get advice on your own personal circumstances.

  • What do I need to consider before joining the Tax-Free Childcare scheme?

    Rachel outlines what you will need to consider before joining the Tax-Free Childcare scheme.

  • How does Tax-Free Childcare work in practice?

    Rachel explains how the Tax-Free Childcare scheme will work in practice. Savings are capped at £500 per quarter - £2,000 per annum.

  • When will Tax-Free Childcare become available?

    Tax-Free Childcare was launched in April 2017.

    Initially, the scheme was only open to parents with a child born on or after 1 April 2013 and / or a child with a disability.

    From 24 November 2017 the scheme extended to households where the youngest child is under 6 or had their sixth birthday on that day. The Government intends that all eligible parents will be able to apply by the end of March 2018 (this has been pushed back from the end of 2017).

    To learn more, download Big Changes, Big Choices – our Tax-Free Childcare guide (by clicking the ‘Download our guide’ link at the top of this page), or contact our Family Benefits Advice Service on 0800 028 3008 to get advice on your own personal circumstances.

  • How will Tax-Free Childcare affect Tax Credits or Universal Credit?

    Chris explains how signing up to using Tax-Free Childcare may affect Tax Credits or Universal Credit.

  • How can I work out which type of help is best for me?

    Chris explains how you can work out which scheme is best for you and your family - Childcare Vouchers or Tax-free Childcare?

  • Where can I get more advice and information about Tax-Free Childcare?

    Chris provides a summary of where you can access more information and advice about Tax-Free Childcare.

  • Can I switch between Childcare Vouchers and Tax-Free Childcare?

    You may be able to switch between Childcare Vouchers and Tax-Free Childcare, however you should seek advice as there are restrictions on those who are eligible to do this.

    If a parent leaves their employer’s Childcare Voucher scheme in order to use Tax-Free Childcare they will be unable to switch back to the same employer’s Childcare Voucher scheme. This is applicable from day one of the Tax-Free Childcare Scheme, not just after the April 2018 closure of Childcare Vouchers to new entrants. This rule is applicable even if the parents find they are worse off using Tax-Free Childcare. A parent could, however, join a different Childcare Vouchers scheme if they were to commence employment, before April 2018, with a new employer that offers Childcare Vouchers. They would have to stop reconfirming their eligibility for Tax-Free Childcare in order to do so.

  • Will I be able to receive Childcare Vouchers after returning from Maternity Leave?

    If you were in the Childcare Voucher scheme but are not currently receiving Childcare Vouchers because you are on maternity leave, can you receive them again when you go back to work?

    This will depend on the length of time you are not receiving Childcare Vouchers and the timing of that period. If you are a member of an employer’s Childcare Voucher scheme you may wish to opt out temporarily, for example, due to maternity leave or taking a career break. Provided you do not have more than 52 consecutive weeks without receiving Childcare Vouchers you will not be considered to have left your employer’s scheme and can resume receiving vouchers on your return to work with the same employer. If you opt out for more than 52 weeks you will be considered to have left the scheme and be unable to re-join after April 2018 as Childcare Vouchers are due to close to new entrants from that date.