⚠️ Please note: we are currently working on updating our tax guidance for 2020/21
across the LITRG website
How do vouchers interact with other schemes?
Help with childcare costs is a complicated area because the Government offers different schemes. Each scheme has different qualifying rules and often the amount you receive can be different. Sometimes if you claim help from one scheme, that can stop you claiming help from other schemes and so you will need to try and work out which one is better for you based on your circumstances.
This page explains how the childcare vouchers interact with other childcare schemes. The rules for claiming childcare vouchers changed from 4 October 2018 – see our Who can claim vouchers? page for more information.
Tax credits and childcare vouchers
For information on how tax credits and vouchers interact, please see our other section.
Universal credit and childcare vouchers
For information on how universal credit and vouchers interact, please see our other section.
Tax-free childcare and childcare vouchers
Tax-free childcare (TFC) is a childcare scheme that was designed to replace childcare vouchers and directly contracted childcare support from employers. It started to roll-out to certain groups of people from 21 April 2017 and was fully rolled-out by 14 February 2018.
The tax and NIC relief associated with childcare vouchers and directly-contracted childcare was withdrawn for new joiners from 4 October 2018. Certain people who signed up before that date are eligible to continue receiving the relief. See our Who can claim vouchers? page for more information.
Parents cannot benefit under both schemes at the same time. Anyone currently claiming childcare vouchers/directly-contracted childcare and who has given their employer a ‘Childcare Account Notice’ (explaining their intention to claim TFC instead and leave the voucher scheme) can no longer claim the tax and NIC relief associated with childcare vouchers and directly-contracted childcare.
Even if they subsequently leave the TFC scheme and meet the conditions for continuing to benefit from the tax and NIC relief on childcare vouchers or directly-contracted childcare, they cannot rejoin their voucher scheme.
See TFC for more information.
Can I use vouchers in conjunction with the government’s free childcare hours offering?
Yes, you can use vouchers in conjunction with the 15/30 free childcare hours offering, to help pay for any childcare costs over and above the 15/30 free hours for example.
Where can I find more information?
You can contact your local Family Information Service for more information about childcare in your area.
GOV.UK contains a basic summary of the help you can get with childcare costs, including more on childcare vouchers and other employer schemes.
You could also look at the government’s Childcare Choices website for further information, including a link to the government’s childcare calculator, which helps you work out what support might be available to you.
HMRC’s technical guidance on childcare vouchers can be found, starting at page EIM16051 in the Employment Income Manual.