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  • Experts in transitions from other providers
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Tax-Free Childcare Update

17th March 2016

In the Budget this week further details on the rollout of Tax-Free Childcare (TFC) were announced. TFC is being launched from early 2017, and the Government has committed to introducing the support in a managed and careful way to provide a smooth journey for parents and childcare providers.

The new TFC scheme will see the Government subsidising 20% of childcare costs up to a total of £10,000 - the equivalent of up to £2,000 support per child, per year. So for every 80p a parent or someone else pays in, the government will top up an extra 20p.

It has been confirmed that the scheme will be gradually rolled out on an age-based approach, allowing parents of the youngest children to enter the scheme first. Families with multiple children will be able to join the scheme when their youngest child becomes eligible, and at that point they will be able to receive support for all their qualifying children. All disabled children will be prioritised so they will join the scheme early on in the rollout process. By the end of 2017 TFC will be open to all eligible parents.

Parents can continue to join the current Childcare Voucher scheme until April 2018. This will help support the transition between the two schemes. After April 2018 the current Childcare Voucher scheme will be closed to new joiners but those parents who wish to remain in the scheme will be able to do so.

Not all parents will benefit from the new TFC scheme and may find they will be better off remaining in the current Childcare Voucher scheme. HMRC has advised that a childcare calculator will be available in advance of the launch of TFC to help guide parents in deciding which childcare option is best for them. As a parent you will be able to choose which scheme is more beneficial to you and your family.

We will be sending further updates on the launch of TFC as we receive them. We will also be posting regular updates on both our Twitter and Facebook pages. You can follow us on Twitter @Fideliti_UK or be a friend on Facebook!