Tax-Free Childcare

Friday 11th March 2022

Recent (2021) FAMCAS results show that 59% of Service families that use childcare do not make use of existing Government childcare initiatives that may help to save families money when accessing childcare.

HM Revenue & Customs (HMRC) have produced a document for Defence which explains one of these initiatives, Tax-Free Childcare (TFC). TFC accounts can be set up for your child and for every £8 that you place in the account HMRC will add an additional £2; this money has to be used on childcare. TFC accounts are necessary for participation in particular schemes and is encouraged for the Wraparound Childcare pilots.

The information pack contains all the useful information about TFC in one place, including links to their calculators to enable parents to work out whether they will be better off using a TFC account, and a handy myth buster section to answer some of the more frequently asked questions.

Do note though that it is not possible to have a TFC account and be part of a salary sacrifice scheme, so families currently using salary sacrifice schemes will need to carefully consider the benefits of both schemes before deciding which will be best for them. Once a salary sacrifice account has been closed it cannot be reopened and it is not possible to open a new salary sacrifice accounts.

Tax Free Childcare

Read the Tax-Free Childcare information pack

See also: Education and Childcare

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