Help with childcare costs

As well as Free Entitlement Funding, there are other ways you can receive help with reducing the cost of childcare.

Tax-Free Childcare

If you’re a working parent, you could receive up to £2,000 per child towards your nursery fees. If your child is disabled, you could receive up to £4,000. This money can be received through the Tax-Free Childcare Scheme.

To use the scheme, you will need to open an online account via Childcare Choices. For every £8 you put in, the government will put in an additional £2. In addition, you must be earning a minimum of £120 per week and no more than £100,000 per year.

Childcare Vouchers

Your employer may provide a childcare voucher scheme which may help you to save money on Tax and National Insurance. You can receive childcare vouchers in return for a reduction in pay, known as a ‘salary sacrifice’. The reduction takes place before Income Tax and National Insurance is deducted, which can be helpful in reducing the cost of your childcare fees.

Tax Credits

If you’re a working parent on a low income, The Childcare Element of Working Tax Credit can help with the costs of childcare. The amount of financial support you can receive will depend on your income, childcare costs, the number of children in your family and your family circumstances.

The Childcare Element can cover up to 70% of your childcare costs. The maximum cost that will be covered by Tax Credits is currently set at £175 per week for one child, and £300 per week for 2 or more children. The Childcare Element of Working Tax Credit is paid to the main carer alongside Child Tax Credit.

You can check to see if you are eligible, how much you can receive and how to make a claim by calling the Tax Credit Helpline on 0345 300 3900 or by visiting the government website.

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