Tax-Free Childcare FAQs
How does Tax-Free Childcare work?
Open an online childcare account per child: for every £8 you pay in, the government adds £2 · a 20% top-up worth up to £2,000 per child per year (£4,000 if disabled, capped at £500/£1,000 per quarter). The account pays Ofsted-registered providers: nurseries, childminders, wraparound and holiday clubs. Reconfirm eligibility every 3 months.
Who gets 15 or 30 free hours?
Working parents in England get funded childcare from 9 months to school age · up to 30 hours a week in term time (38 weeks). Both parents (or a lone parent) must earn at least 16 hours a week at minimum wage, and each must be under £100,000 adjusted net income. Scotland, Wales and NI run their own schemes with different rules.
What is the £100k childcare cliff?
If either parent's adjusted net income tops £100,000, the family loses BOTH Tax-Free Childcare and all free hours. With two nursery-age children that can be £14,000+ lost from a £1 pay rise · on top of the 60% tax trap. The fix is the same: pension contributions reduce adjusted net income, so sacrificing back under £100k usually beats taking the rise. See our 60% Tax Trap calculator.
Can I stack TFC with free hours?
Yes · free hours cover core term-time childcare and TFC tops up everything else: extra hours, meals, consumables, holiday clubs and wraparound care. What you cannot do is combine TFC with Universal Credit childcare or legacy vouchers.
Is Universal Credit childcare better?
Usually, if you qualify: UC refunds up to 85% of childcare costs (capped monthly), far more than TFC's 20%. But opening a TFC account ENDS your UC childcare support · never switch without a full benefits calculation first.
For informational purposes only · Not benefits advice · TFC: 20% top-up, max £2,000/child/year (£4,000 disabled), quarterly caps, 3-monthly reconfirmation · Free hours: England scheme, 38 term weeks, funded rate approximations · Both schemes lost if either parent exceeds £100,000 adjusted net income