An Employers Guide to Tax-Free Childcare

Tax-Free Childcare allows parents to receive financial support towards the cost of employing an Ofsted registered (approved) nanny.  It works similarly to a bank account that both you and the government pay money in to.  For every £8 that you pay in, the government will pay £2.00. The maximum contribution from the government is £2,000 per child per year or, if you have a child with a disability, £4,000 per year.  This money can be used to pay your Ofsted registered nanny.

Eligibility

  1. Eligibility is based on earnings, each working parent must earn at least £125.28 per week and not more than £100,000 per year.
    Both parents must be either employed or self-employed must not be claiming Tax credits or Universal Credit.
  2. This Tax-Free Childcare scheme is available to parents of children up to and including the age of 11 years old or up to and including 16 years old for a child with a disability.
  3. Your nanny must be Ofsted registered with a valid Ofsted registration certificate and number. An Ofsted registered nanny means your nanny has been approved by the government and fulfils various criteria including a DBS Enhanced Disclosure registered with the DBS Update Service, suitable nanny insurance and holding the necessary childcare qualifications required for approval. In order to be paid, your nanny must sign-up with Tax-Free Childcare to be able to receive payments for employment.

Childcare Vouchers

You may already be using the Childcare voucher scheme. To determine which scheme is better for you, please use this government provided childcare calculator: https://www.gov.uk/childcare-calculator.  Most parents paying an average full time nanny salary will be significantly better off using the Tax-Free Childcare scheme.

Useful Links and numbers

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Tel: 01392 428035  |  Email: nannies@parentandchild.co.uk