Working whilst raising a family can be difficult at the best of times, but when you have to use childcare in order for you to work it can become a financial burden. HMRC have recognised that many people’s circumstances have changed since March 2020 and are supporting working parents with childcare costs.

If you are struggling financially trying to juggle work and childcare, then it’s definitely worth checking your eligibility for the government's tax-free childcare support to help families.

Families who are eligible for tax-free childcare can save up to £2,000 per year, or if you have a child with a disability you could get up to £4,000 to help you with the costs of sending your child to breakfast club, after school club or nursery settings and childminders for pre school aged children.

If you have a child under the age of 11 (17 if they are disabled) you could access £2 for every £8 (per parent/carer) towards your childcare costs. This is capped to the value of £500 every 3 months, or £1,000 if your child is disabled. 

You will need and a Tax-Free Childcare account per eligible child. You will need to verify your details every 3 months to ensure that you are still eligible for the scheme. 

It doesn’t take along to sign up for the scheme, and it’s really easy to do.

Am I eligible?

Your eligibility is dependant on:

• Whether or not you are working - this includes being on furlough
• your income (and your partner’s income, combined)
• your child’s age and circumstances
• your immigration status

If you’re not currently working

If you’re currently not working you may still be eligible providing that your partner is working and you get one of the following:

• Incapacity benefit
• Severe disablement allowance
• Carers allowance
• Contribution based employment and support allowance
• If you’re starting or re-starting work within the next 31 days

Your income

You need to be in a position where you expect to earn at least the National Minimum/Living Wage, for at least 16 hours a week for the next 3 months. The same will also apply to your partner.

If you are earning less than this amount due to COVID then you may still be eligible. In order to qualify in this circumstance you must either be furloughed or claiming Self Employment Income Support.

If you are self employed and not making enough profit within the next 3 months in order to qualify you can average out your income over the current tax year, of course this won’t apply if you started your business less than 12 months ago.

If you earn more than £100,000 per year including bonuses then you will not be eligible to claim the tax free childcare.

Your child

In order for you to be eligible your child must be under the age of 11 and live with you. The eligibility will stop on 1st September following their 11th birthday.

If you are a foster parent you are not eligible to claim.

If your child is disabled they are entitled to £4000 per year until they reach 17. They must be entitled to disability living allowance, Personal independence payments, armed forces payments or be certified as blind or severely sight impaired to qualify.

Immigration status

In order to qualify you and your partner if applicable must have a National Insurance number and at least one of the below:

• British or Irish citizenship
• settled or pre-settled status, or you have applied and you’re waiting for a decision
• permission to access public funds - your UK residence card will tell you if you cannot do this

You cannot get Tax free childcare if you are claiming Working Tax Credit, Child tax Credit, Universal Credit or childcare vouchers. It’s important to research and find out which scheme suits your requirements best. In order to do this you can use HMRC’s childcare calculator

You can check your eligibility and apply online here