Paying for childcare

Working parents

Extra help with childcare costs is available through the childcare element of the Working Tax Credit.

It offers up to 70% of the childcare costs, up to a maximum of £175 per week for one child and £300 for two or more children.  This means the most help you can get is £122.50 a week for one child or £210 for two or more children, but remember that you may get less than this because tax credits are reduced by your income.

To be eligible for the childcare element of Working Tax Credit:

  • lone parents must work 16 hours or more each week
  • couples must both work 16 hours or more or
  • one partner must work 16 hours or more each week if the other is incapacitated, in hospital, or in prison or entitled to carers allowance.

For information on the Working Tax Credit see our Tax Credit factsheet, call 0845 300 3900 or visit www.gov.uk/browse/benefits/tax-credits.

Help from employers

Some employers offer help with costs, such as childcare subsidies or vouchers in addition to wages, or they provide childcare in the workplace. Childcare vouchers for up to £55 each week or £243 each month are exempt from tax and national insurance.

For more information see our Employer Childcare Vouchers factsheet, call 0845 300 3900 or visit the Family and Childcare Trust’s website www.familyandchildcaretrust.org/working-parents.

Childcare vouchers  are being replaced by the Tax-Free Childcare scheme, they will remain open to new joiners until April 2018. Parents already using childcare vouchers can continue to do so after this date, as long as the employer continues to offer them.

Tax-Free Childcare

Tax- Free Childcare is for working families, including the self-employed, in the UK who have children under 12 (or under 17 if disabled).  For every £8 you pay in, the government will add an extra £2, up to £2,000 per child or £4,000 if disabled.

You, and any partner, must each expect to earn (on average) at least £120 per week (equal to 16 hours at the National Minimum or Living Wage). If you, or your partner, are on maternity, paternity or adoption leave, or you’re unable to work because you are disabled or have caring responsibilities, you could still be eligible.

If either you, or your partner, expect to earn £100,000 or more, you can’t get Tax-Free Childcare. You can’t use Tax-Free Childcare at the same time as childcare vouchers, Universal Credit or tax credits. You can use it with the 15 hours and 30 hours schemes.

To apply visit www.childcarechoices.gov.uk

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This page was last modified: 31st May 2017