Many of the working families you care for will want to pay through Tax-Free Childcare, and a few clear lines in your contract keep it running smoothly.
How it works
Parents open a Tax-Free Childcare account through GOV.UK. For every £8 they pay in, the government adds £2, up to £2,000 a year for each child, or £4,000 for a disabled child, and the parent then pays you from that account. The scheme covers children up to 11, or up to 16 if they're disabled, and families have to reconfirm their eligibility every three months.
You need to sign up
To receive payments you must be a registered childcare provider and sign up for Tax-Free Childcare as a provider through GOV.UK. Do it before a family needs it, because payments can't reach you until you've signed up.
What your contract should say
List Tax-Free Childcare as one of the ways families can pay. Make clear that the due date is the same however they pay, and that the family is responsible for paying into their account in time and keeping their eligibility up to date. Payments from the account can take a few days to arrive, so encourage families to pay early.
Invoices
Families need a clear invoice to know how much to pay. If you offer funded hours, your invoices must show funded hours, private hours and optional extras separately. Use the same reference each time so you can match payments easily.
How it differs from funded hours
Families often mix up Tax-Free Childcare and funded hours. Funded hours are free hours paid for by the local authority, while Tax-Free Childcare is a top-up on money the family pays for other hours and extras. A family can use both, with funded hours for part of the week and Tax-Free Childcare paying for the rest.
If eligibility lapses
If a family's eligibility ends or they forget to reconfirm, their payments stop. Your contract should say that fees are still due and that they'll need to pay another way until it's sorted.
GoChildmind lists Tax-Free Childcare as a payment method and shows funded and paid hours separately on every child's contract.