Tax-free childcare is a Government scheme to help eligible working families save on their childcare costs. Eligible working parents and carers can open online childcare accounts - just like an online bank account - to pay registered childcare providers directly.
For every £8 paid into an account, the Government will add £2 (£4 for a disabled child), and the total amount in the account can only be spent on childcare. The maximum that can be paid into an account each year is £8,000 and the maximum that will be received from the Government is £2,000 (£4,000 for disabled children.)
Parents can open an individual account for each child they pay childcare for. For example, if you have three children, you can open three tax-free childcare accounts and deposit up to £8,000 into each.
Only a parent or carer can set up a tax-free childcare account, however money can be deposited into the account by parents, friends, family and employers.
For further information visit www.childcarechoices.gov.uk