Tax-Free Childcare and Childcare Vouchers: Everything you need to know
The UK government offers two schemes to help working parents with the costs of childcare: Tax-Free Childcare and Childcare Vouchers.
Tax-Free Childcare is a government scheme that pays 20% of your childcare costs, up to a maximum of £2,000 per year per child. This means that for every £8 you pay into your childcare account, the government will pay in £2.
You can use Tax-Free Childcare to pay for any type of childcare, including:
- Out-of-school club
To be eligible for Tax-Free Childcare, you must:
- Be working (employed, self-employed, or both)
- Have an income of at least £12,000 per year
- Have a child under the age of 11
Childcare vouchers were a government scheme that allowed working parents to save money on childcare costs by paying for childcare with pre-tax salary. However, the scheme closed to new members on 4 October 2018.
If you are already a member of a childcare vouchers scheme, you can continue to use it until you leave your job or the scheme closes.
Which scheme is right for me?
The best scheme for you will depend on your individual circumstances. If you are eligible for both schemes, Tax-Free Childcare is usually the better option, as it gives you more money off your childcare costs. However, if you only have a small income, you may be better off with childcare vouchers, as you do not have to pay any upfront costs.
You can use the government's childcare calculator to work out which scheme is right for you: https://www.gov.uk/childcare-calculator
Tax-Free Childcare and Childcare Vouchers are both government schemes that can help working parents with the costs of childcare. Tax-Free Childcare is usually the better option, but you should use the childcare calculator to work out which scheme is right for you. At SuperCamps we accept Tax-Free Childcare and Childcare Vouchers – learn more about it here.