How much is Tax-Free Childcare worth?
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In short: Tax-Free Childcare adds £2 for every £8 you pay in: a 25% top-up on your deposit, equal to 20% of the total available for childcare. The government adds up to £500 every 3 months per child (£2,000 a year), or £1,000 every 3 months (£4,000 a year) for an eligible disabled child.
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Example: pay £800 into the account and the government adds £200, giving £1,000 for eligible childcare, subject to the 3-month cap. To receive the standard maximum £500 government contribution in a 3-month period, you pay in £2,000.
Eligibility depends on work, expected earnings, the child’s circumstances and immigration status. Neither parent’s expected adjusted net income can be over £100,000 for the tax year. You cannot receive Tax-Free Childcare at the same time as Universal Credit or childcare vouchers.
Use an approved provider signed up to the scheme, and reconfirm eligibility every 3 months. The age limit normally runs to the September after the child turns 11, or 16 if disabled. Check GOV.UK for exceptions and compare other childcare support before applying.
Primary source: www.gov.uk/tax-free-childcare
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