Understanding Tax-Free Childcare: A Guide for Parents

As a parent, paying for childcare can feel like a big expense, but there’s support available that can help. One option is Tax-Free Childcare, a government scheme designed to make childcare more affordable for working families.

What is Tax-Free Childcare?Tax-Free Childcare is a scheme that helps you pay for registered childcare, including nannies, nurseries, and after-school clubs. For every £8 you pay into your childcare account, the government adds £2, up to a

maximum of £2,000 per child per year (or £4,000 if your

child has a disability).

Who is eligible?

• Both parents (or a single parent) must be working

• Each parent must earn at least the National Minimum Wage for 16 hours a week, but less than £100,000 per year

• Your childcare provider must be registered or approved

Nannies and Tax-Free Childcare

If you employ a nanny, they must be registered with Ofsted on the Voluntary Childcare Register to qualify. This ensures that your nanny meets government standards for safety and care, making your childcare costs eligible for Tax-Free Childcare.

How it works

1. You open a Tax-Free Childcare account online.

2. You pay money in to cover childcare costs.

3. The government tops up the account automatically.

4. You pay your registered childcare provider from this account.

Benefits for families using a nanny

Tax-Free Childcare can help cover some of the cost of employing a nanny legally and safely, making a real difference to your monthly budget while still ensuring your child receives high-quality, personalised care.

Getting started

You can check eligibility and apply through the UK Government website. If you’re unsure whether your nanny setup qualifies, or if you’d like guidance on how to manage childcare costs legally and efficiently, I’m here to help.

At Your Nanny Friend, I can support you through the process and help you find the right childcare solution for your family.