The Tax-Free Childcare (TFC) scheme helps working families manage childcare costs by providing support through a wide network of registered providers, including childminders, breakfast and after-school clubs, and approved play schemes across the UK. Parents can also contribute to their TFC account regularly and save their allowances for use during school holidays.
The scheme is available to parents with children up to 11 years old, with eligibility ending on 1 September following the child’s 11th birthday. For children with certain disabilities, the age limit is extended to 1 September after their 16th birthday.
Through the TFC scheme, the government tops up parental contributions by 25%. For every £8 contributed, the government adds £2, up to a maximum of £10,000 per child per year. This offers parents annual savings of up to £2,000 per child (or up to £4,000 for disabled children up to age 17).
The scheme is open to all qualifying parents, including the self-employed and those earning minimum wage. It is also available to parents on paid sick leave, as well as those on paid and unpaid statutory maternity, paternity, and adoption leave. To be eligible, parents must work at least 16 hours per week and earn at least the National Minimum Wage or Living Wage. However, if either parent earns more than £100,000, neither can participate in the scheme.