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A Complete Guide to Tax-Free Childcare
At WMB Childcare, we know many parents want the very best for their children—a nurturing environment where they grow, learn, and build confidence in their early years. Our nurseries are designed to offer all this and more. However, we also understand that for working families, the cost of childcare can be a major consideration.
The good news? Over 1.3 million families in the UK are eligible for Tax-Free Childcare, and yet hundreds of thousands are not making use of this incredible benefit.
If you’re a working parent, you could be missing out on up to £2,000 per year, per child (or £4,000 if your child is disabled) towards your childcare costs. At WMB Childcare, we accept Tax-Free Childcare payments—and we’re here to help you understand exactly how it works.
What Is Tax-Free Childcare?
Despite its name, Tax-Free Childcare isn’t a tax break—it’s a government top-up scheme designed to help working families pay for childcare. For every £8 you deposit, the government adds £2, up to a quarterly limit of £500 per child.
This support can be used to pay for registered childcare providers, including WMB Childcare nurseries, giving you more financial freedom while ensuring your child receives the very best early education and care.
Who Is Eligible?
To qualify for Tax-Free Childcare, you must:
✓ Be working, including self-employed (both parents in a couple must work unless exceptions apply)
✓ Have a child aged 0–11 years (or up to 17 years if the child is disabled)
✓ Earn at least the National Minimum Wage for 16 hours/week and less than £100,000 per year per parent
✓ Not be receiving Tax Credits, Universal Credit, or employer childcare vouchers (note: claiming Tax-Free Childcare will end those benefits)
✓ Be a UK resident, with a child attending Ofsted-registered childcare
You can still use Tax-Free Childcare alongside 30 hours funded childcare, if eligible. See our Government Funded Childcare page for more information.
Exceptions for Non-Working Parents
In certain situations, you can still apply for Tax-Free Childcare even if you are not currently working, including:
✓ You’re on sick leave or annual leave
✓ You’re on maternity, paternity, adoption, or shared parental leave, and already claim Tax-Free Childcare for another child
✓ One parent works and the other is receiving benefits like carer’s allowance, incapacity benefit, or severe disability allowance
If you’re self-employed and in your first 12 months, the minimum earnings rule does not apply.
How Does the Scheme Work?
Tax-Free Childcare is simple and flexible:
✓ Create an account on the government portal (www.childcarechoices.gov.uk).
✓ Pay into the account whenever it suits you—monthly, quarterly, or occasionally.
✓ For every £8 you pay in, the government adds £2, up to £2,000 a year.
✓ Use these funds to pay your nursery fees directly from your account.
Only one parent needs to open the account, but both can use it. You must reconfirm your eligibility every 3 months to continue receiving top-ups.
You can also withdraw funds at any time—though if you do, the top-up portion will be returned to the government.
Where Can the Funds Be Used?
Your Tax-Free Childcare account funds can be used for:
✓ WMB Childcare nursery fees
✓ Childminders, nannies, au-pairs
✓ Playgroups and holiday schemes
✓ Before and after-school clubs
✓ Registered providers on Ofsted, the Early Years Register, or the Childcare Register
This offers peace of mind and flexibility for working families who need reliable childcare throughout the year.
How Much Will You Save?
For every £500 in childcare fees:
✓ You only pay £400
✓ The government contributes £100
✓ That’s a 20% saving, directly into your childcare account.
You can receive a maximum of £500 every 3 months per child, or £1,000 if your child is registered disabled. That means £2,000–£4,000 of support per year, depending on eligibility.
If your childcare needs vary seasonally, it’s best to continue adding funds throughout the year to maximise the top-up available to you—even during quieter months.
Ready to Get Started?
Tax-Free Childcare is one of the easiest ways to make quality childcare more affordable—and WMB Childcare is here to support you every step of the way.
✓ Learn more and apply at childcarechoices.gov.uk
✓ Need help setting up or have questions? Enquire now and our team will be happy to assist.
Also check if you’re eligible for Government Funded Childcare which can be used alongside this scheme for even greater savings.
Frequently Asked Questions (FAQs)
Yes. If you’re due to begin a job within the next 31 days, you can still open a Tax-Free Childcare account.
Yes, but only for older children if you’re already claiming for them. You can also start a claim for the baby you’re on leave for in the final 31 days of your maternity or parental leave.
Your account remains open for two years. You can still use remaining funds (including top-ups earned while eligible) to pay for childcare. However, any new deposits won’t be matched once you become ineligible.
Compare your benefits. If your voucher scheme gives more than £2,000 per year per child, you may be better off staying with it. You cannot use both schemes at the same time.
