Tax-Free Childcare and 30 hours free childcare are two separate government schemes, to help parents with the cost of childcare. You can apply for both through one online application.
Tax-Free Childcare is a new scheme which is being rolled out gradually from 21 April 2017 and will offer working families 20% support towards qualifying childcare costs up to certain limits.
It will eventually replace the directly contracted childcare and childcare vouchers provided by employers under the Employer Supported Childcare Scheme.
The scheme will eventually be open to almost two million families in the UK and is administered by HM Revenue and Customs (HMRC).
You can qualify if you are employed, self-employed or both as long as you (and your partner if you have one) earn at least £120 a week if you are aged 25 or over. You will normally qualify if you are in paid work during some periods of sick leave, maternity, paternity, adoption or shared parental leave if you were earning at least £120 a week before you went on leave.
For every £8 you pay into a Childcare account, the government will pay in £2. It will put in a maximum of £500 every three months for each child - or £1,000 if your child has a disability.
This will operate through an online Childcare account, provided by National Savings & Investments (NS&I) in partnership with HM Revenue and Customs (HMRC), which parents and government can pay money into.
You will pay your childcare costs into this account and the Government will 'top-up' the account with their contribution. Any other person, a grandparent or family member for example, can pay into the account as well.
The money will then be paid directly from this one account to your childcare provider. Normally, you can only pay for childcare that helps you work or stay in work out of the account.