Childcare Benefits and Tax Credits

March 11, 2024

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This guide was last updated on:
March 11, 2024

Benefits and Tax Credits for Childcare

When you make the decision to parent, you're embracing a life-changing commitment. From this moment on, everything changes, including your financial situation. Raising children is both challenging and expensive, particularly when balancing work commitments. Fortunately, numerous forms of assistance are available to help ease this burden.

Child Benefit

  • Introduction: This weekly payment was introduced by Her Majesty's Government in 1990 for all families with children. Despite various changes over the years, it remains a fundamental support mechanism.
  • Eligibility: Available for anyone responsible for a child under 16, or up to 19 if they are in approved education or training. The process is not means-tested, making it accessible to a wide range of families.
  • Claim Process: Fill out a form online or by post. Necessary details include your National Insurance number, information on other children in the household, and bank details. For more information, visit the Child Benefit website or contact the helpline.

Tax-Free Childcare

  • Introduction: Announced in the summer 2015 budget, this scheme offers up to £2,000 per child per year (£4,000 for disabled children) in childcare support for children up to the age of 11 (or 17 for children with disabilities).
  • How it Works: For every £8 spent on eligible childcare expenses, the government adds £2 to your account.
  • Eligibility: Both parents (or the sole parent in a single-parent family) need to be working and earning a minimum amount. The childcare provider must also be registered with the scheme. Self-employed individuals are eligible, with provisions for those with irregular earnings.
  • Application: Apply online, ensuring you meet the earnings threshold and your provider is registered with the scheme.

What Resources Are Available?

  • Childcare Assistance: Various forms of support, including tax relief and benefit payments, are available to cover childcare expenses. Employers may offer programs through PAYE, and Universal Credit payments can also contribute to costs.
  • Tax-Free Childcare Expenses: This includes costs for nurseries, childminders, nannies, after-school clubs, and home care agencies. To qualify, your provider must be enrolled in the program.


The UK government offers a range of supports for families managing childcare costs, including Child Benefit and Tax-Free Childcare. You can apply for Tax-Free Childcare online.

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