Tax-Free Childcare: Opening an account
In order to be entitled to a top-up payment for an entitlement period, a person must hold a childcare account in respect of the child. This section explains what to check before applying for an account, how to open an account and where to get help with an account.
- Before opening an account
- How to open an account
- Unable to open an online account
- Getting help with opening an account
Before make a claim for TFC, claimants should check they are eligible and check that their childcare provider is registered with TFC so that they can receive payments through the on-line system.
Anyone who is currently claiming tax credits, UC, any employer supported childcare (such as childcare vouchers) or any other type of childcare support should seek advice about which type of support is most beneficial for them, in the short and long term, before making a claim for TFC.
Once a tax credit claimant claims TFC, their tax credit award will automatically end, regardless of whether it included any childcare element, and if they change their mind about TFC, HMRC state they will not be able to re-claim tax credits. Now that UC is available across the UK, HMRC state that people can no longer make brand new claim for tax credits and are expected to claim UC instead or pension credit instead.
Official comparison information
There is some information on the official Childcare Choices website, which offers comparison about the different types of help towards childcare costs.
In addition, HMRC have produced a childcare better-off calculator, which can be helpful when comparing the amount provided through tax credits, employer childcare vouchers and TFC. The problem with the calculator is that it doesn't cover UC and by giving indications about potential tax credit or employer supported childcare voucher entitlement, it is somewhat misleading as both of those two options are now closed to new joiners.
30-hours free childcare
Working families in England are entitled to claim 30 hours of free childcare or early education per week for 38 weeks. The total of 1140 hours per year can be used flexibly and can be used with more than one provider. There are different schemes in Scotland, Wales and Northern Ireland. There is more information about this childcare support on the GOV.UK website.
To apply for the 30-hours free childcare, claimants have to set-up the same on-line childcare account as when they are claiming TFC.
It is very important that claimants take care what they are claiming when completing the on-line childcare application. Many people who have intended only to claim their 30-hours free childcare option have mistakenly also claimed TFC, which has the unintended consequence of terminating their tax credits award.
To claim tax-free childcare (TFC), the claimant needs to open a childcare account for each child. TFC is a digital by default system and the legislation states that an application to open a childcare account and declarations of eligibility must be made by HMRC by electronic communications, unless certain exceptions apply - see below.
Only one child can be included in any childcare account and claimants will need to open separate childcare accounts for each of their qualifying children. Childcare costs for each child must be paid out of the correct account - it is not possible to transfer top-ups between accounts.
To open an on-line childcare account, the claimant needs to go via the GOV.UK website. They will need to use their Government Gateway account, or they will need to set one up if they don't already have one. To set-up a Government Gateway account, claimants will need their National Insurance number; access to a mobile phone or landline telephone and details of one or more of the following: their UK passport; tax credits; P60 or a recent payslip.
To set-up the childcare on-line account, claimants, and their partners, will also need their:
- National Insurance number
- Unique Taxpayer Reference (UTR), if they're self-employed
- The child's child benefit number if child benefit has been claimed by the TFC claimant (including, if child benefit has been claimed by someone else and the TFC claimant can reasonably get hold of the child benefit number).
The application to open a childcare account will only be granted if:
- The applicant had made a valid declaration of eligibility (confirming that they are an eligible person and meet the relevant conditions for TFC)
- The child is a qualifying child at the date of application
- There is no other person who holds an active childcare account in respect of the same child.
HMRC say it can take up to 7 days before they confirm a claimant is eligible for TFC, although it can often happen more or less straightaway.
Claimants can pay their childcare provider with money from the childcare account once the money is shown as 'available funds'. It usually take 3 working days for the money to reach the childcare provider's account once payment is sent. See our managing a TFC account section for more information about making payments.
The requirement to apply for a childcare account online or make a declaration of eligibility online (via electronic communications) does not apply if HMRC are satisfied that the person making the application or declaration:
- Is prevented by a court order from sending information by electronic communications
- Hold beliefs which are incompatible with the use of electronic communications
- Is unable to send information by electronic communication my reason of:
- Inability to operate a computer effectively in a manner that cannot be remedied by the use of assisted digital support (this includes advice and assistance on how to make an application or declaration by means of electronic communications and entering a person's information into the service on that person's behalf)
- Living in a remote location so that it is not reasonably practicable to use electronic communications
- Is prevented for a continuous period of at least 7 days by a technical failure affecting HMRC from making a declaration or application
Anyone who thinks any of these exceptions might apply should contact the childcare service helpline (details below).
- Telephone: 0300 123 4097
- Textphone: 0300 123 9232
Last reviewed/updated 26 May 2022