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Tax Free Childcare is to be introduced from April 2017 as a replacement for employer supported childcare (childcare vouchers).

The scheme allows parents to create an account where they can set aside money to pay for childcare provsion for their children and from which the payments are debited to a registered childcare provider.

The governement will contribute up to 20% of the first £10,000 of registered childcare costs per child per year.  For example for every £8.00 paid in, HMRC will add £2.00. This equates to a maximum of £2000 per child per year or £4,000 if the child is disabled.

The scheme is open to working parnets with children aged under 12, or under 17 if the children are disabled.

Tax-free Childcare cannot be used at the same time as childcae vouchers or tax credits.

The scheme will be available to people who have an annual income under £150,000 and are not receiving help with childcare via tax credit.  It is expected to reach more people than the current scheme.