Government increases cap on tax-free childcare

The government has increased the cap of its tax-free childcare scheme so that working parents will be able to receive up to £2,000 per child, instead of the £1,200 that was previously proposed.


In its Delivering tax-free childcare: the government’s response to the consultation on design and operation, the government also said it will extend the offer of free nursery care for three- and four-year-olds to 15 hours a week, and will introduce free nursery care for the most disadvantaged two-year-olds.

The new scheme, which is to take effect from autumn 2015, was announced in the 2013 Budget.

In the government’s response, Chancellor George Osborne and Danny Alexander, chief secretary of the Treasury, said: “We have engaged through consultation with a wide range of parents and stakeholders, those who know the childcare system best.

“We will deliver a smooth and simple user experience, with a single point of contact for parents to register for the scheme, make payments into their account, and arrange payments to their childcare provider.”