Tax-free Childcare

What is Tax-free Childcare and how does it work?

Tax-free Childcare is a government scheme to help working parents with their childcare costs. A nanny must be Ofsted registered in order for a family to benefit from this.

Since 2017, working parents with children under 12 (or under 17 for disabled children) can set up an online childcare account to pay their Ofsted-registered nanny or other childcare providers. For every £8 parents pay in, the government will add £2, up to a maximum contribution of £2000 per child, per year (£4,000 per year for disabled children).

Who is eligible for Tax-free Childcare?

To be eligible for Tax-free Childcare both parents must be working in a two-parent household, or the single parent in a single-parent household, and each must be earning at least £115 a week and no more than £100,000 each year. The parent must have a child living with them, be in paid work and not be receiving other government support towards the cost of childcare (i.e Childcare Vouchers, Tax Credits etc). We recommend that nanny employers check their eligibility with Childcare Choices by using the online calculators.

Tax-free Childcare for Nannies

In order for eligible parents to receive payments via this scheme, you must be registered with a childcare regulator such as Ofsted. If you want to apply for Ofsted-registration you’ll need Public Liability Insurance (Nannyinsure covers this!). You can read more about how to register with Ofsted here.