Tax-free childcare: interaction with other schemes
There are a variety of schemes offering help towards the costs of childcare. Some of the schemes interact with each other and you can combine them, whereas other schemes can only be claimed on their own.
Tax-free childcare and other childcare schemes
You can claim tax-free childcare in conjunction with the government’s free childcare hours offering to help pay for any childcare costs over and above the 15/30 free hours, for example.
You are not entitled to tax-free childcare and universal credit at the same time. If you are getting universal credit and want to claim tax-free childcare, HMRC advise that you wait for a decision about your tax-free childcare application before cancelling your universal credit. The interactions between tax-free childcare and universal credit can be complicated so we advise that if you are getting universal credit and are thinking of claiming tax-free childcare, you seek advice from a welfare rights specialist.
Parents cannot benefit under both tax-free childcare and childcare vouchers/directly contracted childcare at the same time. Anyone currently claiming such support, who has given their employer a ‘Childcare Account Notice’ (explaining their intention to claim tax-free childcare instead and leave their scheme) will have their vouchers or directly contracted childcare stopped.
The tax and national insurance relief associated with childcare vouchers and directly-contracted childcare was withdrawn from 4 October 2018 for new applicants. Certain people who signed up before that date are eligible to continue receiving the relief. See our childcare vouchers page for more information.
This means that even if you subsequently leave the tax-free childcare scheme and meet the conditions for continuing to benefit from the tax and national insurance relief on childcare vouchers or directly-contracted childcare, you cannot rejoin such schemes.
Some people will be better off claiming tax-free childcare than universal credit. Similarly, some people may be better off claiming tax-free childcare than childcare vouchers/directly-contracted childcare. However, some people will be better off staying on the other schemes.
More information about childcare schemes
The GOV.UK website offers some information about government schemes and the Best Start in life website also provides some extra information to help people find out more about the various childcare offers.
