• Olga

Are you among 78% of people missing out on the Government support with childcare?

What is the aim of the TFCS (Tax Free Childcare Scheme)?

· To support eligible families with their childcare costs.

What is the financial benefit of the TFCS?

· For every £8 paid into the scheme by you, the Government will add an extra £2 up to a maximum of £2,000 per child per year (£4,000 for a disabled child).


· Mary has two children aged 5 and 7.

· Mary pays £400 a month into each of the two TFCS accounts.

· The Government top up each TCFS accounts by £100 per month.

· An annual saving for Mary of £2,400.

What is the eligibility criteria?

· Your child must be 11 or under and usually live with you. They stop being eligible on 1st September after their 11th birthday.

· If your child is disabled then they must be 17 or under and usually live with you.

· Adopted children are eligible but foster kids are not.

· You must use an approved childcare provider who is set up to take payments through TFCS.

· You can be either employed or self-employed.

· You (or your partner, if you have one) must have a National Insurance number and at least one of the following:

a) British or Irish citizenship.

b) Settled or pre-settled status, or you have applied and you’re waiting for a decision.

c) You have permission to access public funds – your UK residence card will tell you if you cannot do this.

· You will need to earn, on average, at least the National Minimum Wage/National Living Wage for at least 16 hours per week.

· If you have a partner, then they must do the same unless they receive:

a) Incapacity Benefit

b) Severe Disablement Allowance.

c) Carer’s Allowance.

d) Contribution-based Employment and Support Allowance.

· You or your partner’s total ‘adjusted income’ must be no more than £100,000 for that tax year.

· You cannot be in receipt of:

a) Working Tax Credit.

b) Child Tax Credit.

c) Universal Tax Credit.

d) Childcare vouchers.

How do you work out your ‘adjusted income’?

· This is your total income for the tax year, before taking off your tax free personal allowances, but after deducting:

a) Trading losses.

b) Gift Aid payments

c) Certain pension contributions.

Who is deemed to be a ‘disabled’ child?

· If they are in receipt of:

a) Disability Living allowance.

b) Personal Independence Payment.

c) Armed Forces Independence Payment.

d) Child Disability Payment (Scotland only).

· They are certified as blind or severely sight-impaired

What is meant by a ‘partner’?

· You are married or in a civil partnership and live together in the same household.

· You are living together as if you are married or in a civil partnership.

· You do not need to declare your partner if they are either:

a) Absent and not expected to return within the next 6 months.

b) In prison.

How do you find out if the childcare provider has been approved?

· It depends on which part of the UK you live, as per the link below:

Help paying for childcare – GOV.UK (

· Examples of approved childcare providers might be nurseries, childminders, nannies, after school clubs and play schemes.

How does the TFCS operate?

· You open up a Tax Free Childcare account for each child per the link below:

Apply for Tax-Free Childcare - GOV.UK (

· When setting up the account you confirm your eligibility.

· You should go back into the account to re-confirm your eligibility every 3 months. You will be notified to do so.

· Once money is paid into the account for that child it cannot be switched between other children in the family or elsewhere.

· There is no limit on the amount which can be paid into a Childcare account by you. HMRC will only top up payments to a maximum of £2,000 per child per year (£4,000 per disabled child).

· Payments can be made regularly, or as one-off payments by direct debit, standing order, electronic bank transfer or debit card

Who can pay into the account?

· Friends, family, employers etc. can make payments into the account, payments are not limited to the child’s parents.

If you wish to discuss the Tax Free Childcare Scheme or other issues please do contact us.

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