Get help paying for childcare: How to use tax-free childcare

3 Oct 2023

What is Tax-Free Childcare?

You can obtain up to £500 every three months (up to £2,000 per year) for each of your children to help with childcare costs. If a child is disabled, this increases to £1,000 every three months (up to £4,000 per year).

If you qualify for Tax-Free Childcare, you will have to create an online account for your child. The government will deposit £2 for every £8 you deposit into this account to be used to pay your supplier. If you are eligible for both, you can receive Tax-Free Childcare as well as 30 hours of free childcare.

Childcare can only be subsidised if it is given by a:

  • registered childminder, nanny, playscheme, nursery, or club
  • registered childminder or nanny working for a registered childminder agency or childcare agency
  • registered school
  • home care worker working for a registered home care agency

This is referred to as ‘approved childcare’.

Childcare at School

You can only get assistance with paying for care that occurs outside of school hours, such as after-school clubs or breakfast clubs. You will not be able to receive assistance in paying for:

  • your child’s obligatory education, or
  • private lessons during school hours (for example, private music lessons during school hours)

However, if your child has not yet begun primary school, you may be eligible for assistance in paying for school-provided childcare. This includes the cost of nursery school.

How to use Tax-free childcare

Check your eligibility

Your eligibility depends on:

  • If you’re working (employed, self-employed, or both)
  • Your income (and your partner’s income, if you have one)
  • Your child’s age and circumstances
  • Your immigration status

Furthermore, you cannot use Tax-Free Childcare together with:

  • Tax Credits
  • Universal Credit
  • Childcare Vouchers

Check more about your eligibility at:

Apply for tax-free childcare

If you are eligible, you will be given an online childcare account. Watch this video to learn more about applying.

You can apply for tax-free childcare here:

Pay money into your childcare account

You can put funds into your childcare account using a debit card, but a standing order or bank transfer is faster. The government top-up will be immediately added by HMRC, and you will be able to spend it once it appears as ‘available’.

Select your childcare provider(s)

To receive Tax-Free childcare payments, the childcare provider(s) must sign up.

Pay your childcare provider(s)

Make one-time or recurring payments to your childcare provider(s) using the funds in your childcare account, including the government top-up.


To continue receiving government top-ups, you must confirm your information is up to date every three months. You will be notified by the HMRC when this needs to be done.

Wraparound care given by schools has a number of advantages for students, parents or guardians, and schools. It provides a safe and supportive atmosphere for children to study, play, and socialise. It gives parents and guardians peace of mind that their children are in a familiar and secure environment. Lastly for schools, it can help play a part in boosting academic performance while alleviating stress on staff members and educators.

Tax-free childcare is a great support for working families to ensure that their child’s care is uninterrupted. However, coordinating wraparound care can be a challenging undertaking for schools. ParentPay’s Club Management solution is designed to help schools make wraparound effortless by managing school clubs seamlessly. Learn more about what our Club Management solution has to offer here. 

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