Under the Government’s new ‘Tax-Free Childcare scheme’ parents can qualify for up to £2,000 worth of care free of charge.

From April 28 the government will start a scheme contributing 20p for every 80p that working parents spend on care costs each year.

Parents will receive up to £2,000 per year for each child.

The scheme will originally focus on parents with children aged two and under.

Am I Eligible?

To qualify, parents will have to:

  • Be employed
  • Both parents must be earning at least £115 a week and not more than £100,000 each year.
  • Live in England

While both parents must be working to qualify, those temporarily absent from the workplace such as those on paid or unpaid maternity, paternity or adoption leave will still be eligible.

How can I get involved?

Parents must express their interest online by pre-registering on the Childcare Costs website (LINK www.childcarechoices.gov.uk).

Your application will then be reviewed, and if successful, you’ll be able to open an online account – provided by NS&I.

You then pay into this account, which is then topped up by the government to cover the cost of childcare.

For every £8 that families or friends pay in, the government will make a top-up payment of an additional £2, up to a maximum of £2,000 per child per year (or £4,000 for disabled children).

This top-up is added instantly and parents can then send electronic payments directly to their childcare providers.

And there’s an extra 30 hours’ free childcare

On top of this, from September this year, parents of three-and-four-year-old children living in England will also be able to apply for a new 30 hours free childcare offer, which the government says is worth around £5,000 per child.

Eligible parents can benefit from both tax-free childcare and free childcare at the same time.

Parents will be able to apply online through the childcare service.

They will receive a code – this will allow parents to arrange their childcare place ahead of September 2017.

Parents can take their code to their provider or council, along with their National Insurance Number and child’s date of birth. Their provider or council will check the code is authentic and allocate them a free childcare place.

For more information, the Childcare Choices website (LINK www.childcarechoices.gov.uk) includes a Childcare Calculator for parents to compare all the support options available, and narrow down what works best for their families.