At the end of April, the government launched a new scheme aimed at helping working parents cover childcare costs. Tax-Free Childcare is being rolled out now, beginning in the first instance with parents with the youngest children.

For each £8 paid by a parent, the government will provide an additional £2. The government will pay up to £2,000 per child each year towards the cost of childcare, up to a total of £10,000. Parents of children with disabilities will receive £4,000 per year, up to a total of £20,000.

To be eligible for the scheme, parents and partners who live at the same address generally need to earn a minimum income of £120 a week (on average), and each must earn under £100,000 per annum.

Tax-Free Childcare will be on offer for children up to 12 years of age, (17 years of age for children with disabilities). Parents who qualify for the scheme will be able to enrol before the end of December 2017. Eligible parents can request payments for all of their children at once; however, the scheme will prioritise the youngest children to start with. Parents must have an online account, and pay childcare costs to a registered childcare provider from this account.

Employers offering Employer Supported Childcare (normally via childcare vouchers) should note that these schemes may stay open to new applicants until April 2018. Any existing members may choose to stay in their employer-related scheme or switch to Tax-Free childcare when their child is eligible. Parents cannot take advantage of both employer-supported childcare and government-provided tax-free childcare simultaneously.

At GOV.UK, parents can find a calculator that compares options. The site also provides guidance on free, government-provided childcare available.

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