Tax-Free Childcare: Entitlement periods
When a person joins the tax-free childcare scheme, they set up an on-line childcare account. For those unable to set up an on-line account, there is a telephone option via the childcare helpline.
Eligibility for top-up payments is based around meeting certain conditions in an entitlement period. The claimant must reconfirm their eligibility at the end of each entitlement period for their tax-free childcare to continue into the next period.
- How long is an entitlement period?
- Variations to entitlement periods
- When does an entitlement period start?
Each entitlement period usually lasts for 3 months, although HMRC have powers to vary this in some cases by up to 2 months.
HMRC can alter the length of an entitlement period by up to 2 months:
- On the opening of a childcare account in relation to the person's first entitlement period.
- On the opening of a childcare account for a person's second or subsequent child (so that the entitlement periods of the two or more childcare are aligned.
- In order to align the entitlement periods of two account holders.
- In order to align the entitlement period of a TFC claimant with the declaration period of their partner under the early years scheme.
Where this happens, the maximum level of top-up payment is pro-rated to match the number of days in the varied entitlement period. The formula used for this is:
Maximum top-up amount (£2,000-£4,0000) x Number of days in new entitlement period / 91
A person's first entitlement period begins on the day that HMRC confirms that the person is an eligible person for the entitlement period. Normally this is an automatic process and there is very little delay between the person claiming TFC online and the start of their first entitlement period.
Each subsequent entitlement period begins on the day after the previous entitlement period ends and begins on the same day of the month, except:
(a) If the first entitlement period begins or ends on the 31st day of a month, each subsequent entitlement period begins or ends on the last day of the month.
(b) If the first entitlement period begins or ends on the 29th or 30th day of a month, each subsequent entitlement period begins or ends on the 29th or 30th of the month, except in February where it begins or ends on the 27th day or, in a leap year, the 28th day.
Last reviewed/updated 1 July 2022