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Tax-Free Childcare: Top things childcare providers should know

Also published by:
HM Treasury

Top things childcare providers need to know about Tax-Free Childcare.

10 things parents should know about Tax-Free Childcare


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

Parents will be able to 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 up to the age of 12, or 17 for children with disabilities.

To qualify, parents will have to be in work, and each expecting to earn at least £115 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 launched from early 2017. The scheme will be rolled out gradually to families, with parents of the youngest children able to apply 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 are being sent to regulated and approved childcare providers across the UK, asking you to sign up online for Tax-Free Childcare.

You’ll be able to sign up online as soon as you receive your invitation.

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

Only childcare providers registered with a regulator (such as Ofsted) 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 regulators website.

More information about registering with a regulator

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.

Parents will be able to see if you’ve signed up for Tax-Free Childcare

Once you’ve signed up, you’ll appear on our new digital tool which lets parents search for childcare providers who can be paid using Tax-Free Childcare.

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 0300 200 3410.

More information on registering your business with HMRC

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.

Looking forward

More information about Tax-Free Childcare will be available later this year.

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