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Tax-Free Childcare

24 Jun 2017

Tax-Free Childcare (TFC) is a new government scheme to help working parents with the cost of childcare, and will, over time replace the Childcare Voucher Scheme (CVS). Parents have the option to open an online account, which they can use to pay for childcare from an accredited and 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 care costs, or £4,000 for disabled children. The scheme is available for children under the age of 12, or under 17 for children with registered disabilities.

To qualify, both parents will have to be in work (or the sole parent is working in a lone parent family), and each parent earns, on average, a weekly minimum equivalent to 16 hours at national minimum wage (NMW) or national living wage (NLW), and less than £100,000 per year.  The Childcare Choices website, www.childcarechoices.gov.uk provides more detail about the TFC scheme and how to join. The website also includes a Childcare Calculator for parents to compare the government’s childcare offers, including the CVS and check what works best for their families.

Eligible parents can choose to either enrol each of their children into the TFC or participate in the CVS (while the CVS remains open to new joiners). No child / parent can be a member of both schemes at the same time, but children on CVS can transfer to TFC at any stage while eligible. Children on TFC may not transfer back to CVS. The CVS will remain open to new joiners and re-joiners until 31 March 2018. After that date only TFC will be available to joiners and re-joiners.

The government launched TFC on 21 April 2017 and the scheme will be gradually rolled out across the UK and in certain overseas locations during the remainder of 2017, with parents of children under two invited to enter the scheme 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.

Eligible parents in overseas locations including Germany, Cyprus and Gibraltar can now join the scheme from with Rest of the World (RoW) locations including Brunei, Falklands, Italy, Netherlands, Belgium and Canada able to join later in 2017.

Childcare Providers (CCPs)

For eligible parents to use their TFC account, CCPs need to be registered on the TFC portal. Only childcare providers registered with an accredited regulator can receive TFC payments. To register with a regulator can take up to 12 weeks. Once signed-up, CCPs will appear on the new digital tool which lets parents search for childcare providers who can be paid using TFC. The tool can be accessed by visiting www.childcare-provider-checker.tax.service.gov.uk.

How to identify regulated CCPs

In overseas locations, CCPs are regulated by Ofsted, BFEYS and SSAFA. Each regulated CCP has been issued with a unique identifier which parents can use when searching for a setting on the TFC portal. Both the regulator and CCP will be able to provide parents with their unique identifier. To search for MOD providers using the digital tool, parents need to enter the regulator unique identifier and postcode (eg BFPO16) into the search field.

Contact Details

To make contact with British Forces Early Years’ Service (BFEYS), please visit their website, www.bfgnet.de/education/bfeys.html or call Bielefeld Mil (9-4881) 2668 or +49 (0)521 9254 2668. To make contact with SSAFA, please call 0800 731 4880 or +44 (0)207 403 8783. To make contact with MOD Schools’ settings, please contact DCYP MOD Schools HQ on Mil 94344 8729 or Civilian +44 (0)1980 61 8729. To make contact with the HMRC TFC Team, please call +44 (0)300 123 4097 or visit https://childcare-support.tax.service.gov.uk