Childcare Vouchers vs Tax-Free Childcare

childcare vouchers

Tax-free childcare is the new government scheme which will replace the childcare voucher scheme. From 2017 working parents can set up an online childcare account to pay their childcare providers directly. The government will add 20%, up to a maximum contribution of £2,000 per child per year.

The childcare vouchers scheme will remain open to new parents until April 2018. It is important to join the existing employer Childcare Voucher scheme before April 2018 to give you the choice in case you are not eligible for the new Tax-free childcare scheme.

Tax-Free Childcare is also now available to self-employed people.

You would only save 20% on childcare costs of up to £10,000 per child. If you spend £100 on childcare you could save £20 / 20% (based on a basic rate taxpayer), where previously under childcare vouchers if you spent £100 on childcare you saved £32 / 32% (based on a basic rate taxpayer)

For more information on the scheme please visit:

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