How To Use Tax-Free Childcare To Pay For Tuition


What is Tax-Free Childcare?

The Tax-Free Childcare Scheme was rolled out in 2017 to help parents with childcare costs. It’s been around for almost 6 years, with 1.3 million families eligible to take advantage of this scheme. Yet around 800,000 aren’t using this benefit.

What is it?

Tax-Free Childcare is a government funded scheme that gives working parents the financial support they need when covering childcare costs. Parents could potentially receive an additional £2000 a year per child to go towards their childcare costs, including nursery, childminders and tuition providers like Greenhouse Learning.

How does it work?

The scheme works so that for every £8 that goes into the account, the government will top it up with £2. This translates to a 20% top-up from the government. This is capped at £2000 a year, or £500 every 3 months. In total, if a parent paid in £8000, they would receive the full £2000 top up within the year, giving them £10,000 to spend on childcare.

Remember that applying for Tax-Free Childcare will completely stop other benefits that you may be receiving, such as universal credit or tax-credits. Make sure to check whether this is the right step for you, as you may be able to save more by sticking with your current benefits. Citizens Advice offers plenty of information to help you make the right decision.

Who is eligible?

The scheme is open to working parents, including those that are self-employed.

It’s important to note that when working, each parent must be earning a minimum of 16 hours a week at National Minimum Wage, but less than £100,000 a year.

Previously, those receiving childcare vouchers were able to use the funding for children aged 15 and younger, whereas the Tax-Free scheme only applies to children aged 11 and under, or 16 and under if they have a disability.

How do you apply?

If eligible, applying is super easy to do. The first step is to create an online childcare account through the government website. Make sure to have your national insurance number at hand to do this.

Only 1 parent is able to make the account, but of course, multiple people can access it as and when they need to. To pay into the account, it’s best to do so through a bank transfer or standing order, but you’re able to do so with a debit card when necessary. Anyone is able to pay into the account, not just the account holder, as long as they have the relevant details to do so. Once the money has been paid into the account, the government will top up the 20% immediately, but it could take 1 working day to be available for use.

Money from the ‘available funds’ can then be used to cover any childcare costs. Note that you have to reconfirm your eligibility every 3 months otherwise the 20% top-up will not be available.

Who accepts it?

Once you log into your account, you’ll be able to see details of all the registered providers and then be able to pay them directly from your account to theirs.

Greenhouse Learning accepts Tax-Free Childcare as a form of payment for your tutoring programme. Search for “Greenhouse Learning” as a childcare provider on your online childcare account, and we should show up:

We also accept childcare vouchers, which are still open to existing users of the scheme. As an Ofsted registered provider, we can accept most childcare voucher schemes (Edenred, Computershare etc). If you’re unsure or have any questions, don’t hesitate to contact our team, we’re always happy to help!

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Greenhouse Learning helps students across the Southwest become independent learners. Get in touch with us to discuss how we can help you support your child to achieve their full potential.