Tax-Free Childcare and childcare vouchers compared
Tax-Free Childcare can be used alongside your funded hours to bring down the cost of extra sessions. If you joined a voucher scheme years ago, you'll want to compare the two carefully.
£2 for £8
Government top-up on every payment
£2,000
Maximum top-up per child per year
90 days
To leave a voucher scheme after switching
In this guide
How Tax-Free Childcare works
You open an online childcare account. For every £8 you pay in, the government adds £2, up to £2,000 per child per year (£4,000 for a disabled child). You then pay your registered provider from the account.
Eligibility is similar to 30 hours: you must be working, meet the minimum earnings threshold, and each earn under £100,000. It can be used for children up to 11 (or 16 if disabled).
Childcare vouchers
Employer childcare voucher schemes closed to new joiners in October 2018. If you were already a member and have stayed with the same employer, you may still be able to use them, saving tax and National Insurance on part of your salary.
You cannot use childcare vouchers and Tax-Free Childcare at the same time. Once you open a Tax-Free Childcare account, you have 90 days to leave your voucher scheme.
Which is better for you?
As a rule of thumb, Tax-Free Childcare tends to suit families with higher childcare bills or two children in care. Vouchers can sometimes suit basic-rate taxpayers with lower costs.
- Add up your annual childcare costs after funded hours
- Run both options through the Childcare Choices calculator
- Check whether Universal Credit childcare support is better for you
- Remember you can't claim both at once
Tax-Free Childcare and childcare vouchers side by side
| Tax-Free Childcare | Childcare vouchers | |
|---|---|---|
| Open to new joiners? | Yes | No, closed in October 2018 |
| How you save | £2 top-up for every £8 you pay in | Tax and NI saved through salary sacrifice |
| Maximum benefit | £2,000 per child a year (£4,000 if disabled) | Up to around £933 a year per parent |
| Per child or per parent? | Per child | Per parent |
| Moves with you if you change job? | Yes | No, tied to your employer |
| Use with 30 hours? | Yes | Yes |
You can't use both at once. Run the numbers on the GOV.UK childcare calculator before switching.
Questions parents often ask
Can my partner stay on vouchers while I use Tax-Free Childcare?
No. If either of you opens a Tax-Free Childcare account, any voucher scheme in your household has to stop within 90 days.
Can I use Tax-Free Childcare for holiday clubs?
Yes, if the club is registered with Ofsted (or the equivalent body) and signed up to receive payments.