Simply Business homepage
  • Business insurance

    • Business Insurance FAQs

    Business insurance covers

  • Support
  • Claims
  • Sign In
Call Us0333 0146 683
Our opening hours

Self-employed tax-free childcare – how to apply

2-minute read

Teacher with toddlers in nursary
Josh Hall

Josh Hall

24 March 2023

Share on FacebookShare on TwitterShare on LinkedIn

Did you know that you may be eligible for tax-free childcare as a small business owner?

While some government childcare schemes aren't available to the self-employed, you may still be able to claim tax-free childcare. Here, we explain the eligibility guidelines for the scheme, along with how to apply.

What is tax-free childcare?

Tax-free childcare is a scheme operated by the government to provide financial support for new parents with children in childcare.

Parents can receive up to £2,000 a year for each child to help with the costs of childcare. If you qualify, the government will pay £2 for every £8 you pay to your childcare provider. This must be done through a tax-free childcare online account.

You may also be able to get 30 hours' free childcare – a scheme which has been expanded in the Spring Budget. Currently parents living in England may be able to get 30 hours a week of free childcare if their child is aged three or four.

Tax-free childcare for the self-employed – eligibility

Self-employed people are eligible for tax-free childcare just like employees.

Eligibility depends on:

  • whether you're currently working
  • your income (and partner's income, if you have one)
  • your child's age and circumstances
  • your immigration status

To be eligible, over the next three months you and your partner (if you have one) must each expect to earn at least:

  • £1,976 if you’re aged 23 or older
  • £1,909 if you’re aged 21 or 22
  • £1,420 if you’re aged 18 to 20
  • £1,000 if you’re younger than 18 or an apprentice

This works out as at least the national minimum wage for at least 16 hours a week, on average.

You can average your self-employment income across the year to meet the minimum income criteria, providing you aren't also getting employment income.

If you're newly self-employed (within the last 12 months) then you can earn less and still be eligible for tax-free childcare.

Additionally, your child must be 11 years old or younger, and they must live with you most of the time. You can't claim tax-free childcare for foster children, but you can for adopted children.

If your child is disabled, the amount you may be entitled to increases to £4,000 a year until they are 1 September after their 16th birthday.

To qualify for this extra amount, the child must be getting Disability Living Allowance, Personal Independence Payment, Child Disability Payment (in Scotland), or Adult Disability Payment (in Scotland).

Get small business guides and news straight to your inbox

Your email address will be used by Simply Business so that we can send you the latest guides, offers and tips. You can unsubscribe from these emails at any time. For more information, check out the Simply Business privacy policy.

Tax-free childcare and other benefits

You can’t claim tax-free childcare at the same time as Working Tax Credit, Child Tax Credit, or Universal Credit. If you successfully apply for tax-free childcare, your Working Tax Credit or Child Tax Credit will stop immediately, but the government says you should apply for Tax-Free Childcare before you cancel your Universal Credit.

It can be confusing to determine which scheme you’re better off on. To help with this, you can use the government’s childcare calculator.

How do I apply for self-employed tax-free childcare?

You’ll need to apply online for tax-free childcare if you’re self-employed. The process takes around 20 minutes. You’ll need your National Insurance number and your Unique Taxpayer Reference, along with those of your partner if applicable.

Some eligibility applications are settled immediately, but it can take up to seven days.

More small business guides and resources

Looking for self-employed insurance?

With Simply Business you can build a single self employed insurance policy combining the covers that are relevant to you. Whether it's public liability insurance, professional indemnity or whatever else you need, we'll run you a quick quote online, and let you decide if we're a good fit.

Start your quote
Josh Hall

Written by

Josh Hall

We create this content for general information purposes and it should not be taken as advice. Always take professional advice. Read our full disclaimer

Find this article useful? Spread the word.

Share on Facebook
Share on Twitter
Share on LinkedIn

Keep up to date with Simply Business. Subscribe to our monthly newsletter and follow us on social media.

Subscribe to our newsletter


HomePopular articlesGeneral businessGuestInsuranceLandlordLandlord resourcesLegal and financeMarketingNewsOpinionProperty maintenanceTradesmanCovid-19 business support hub


Public liability insuranceBusiness insuranceProfessional indemnity insuranceEmployers liability insuranceLandlord insuranceTradesman insuranceSelf-employed insuranceRestaurant insuranceCommercial van insuranceInsurers


About usOur teamAwardsPress releasesPartners & affiliatesOur charitable workModern Slavery ActSection 172 statementSocial mediaSite map

Customer support

Contact & supportPolicy renewalMake a claimProof of policyComplaintsAccessibility


6th Floor99 Gresham StreetLondonEC2V 7NG

Sol House29 St Katherine's StreetNorthamptonNN1 2QZ


Careers at Simply BusinessTech careersCurrent opportunities


BenefitsRefer a friendFinance


Terms & conditionsPrivacy policyCookie policyVuln Disclosure policy


Knowledge centreOpinionsMicrosites

© Copyright 2023 Simply Business. All Rights Reserved. Simply Business is a trading name of Xbridge Limited which is authorised and regulated by the Financial Conduct Authority (Financial Services Registration No: 313348). Xbridge Limited (No: 3967717) has its registered office at 6th Floor, 99 Gresham Street, London, EC2V 7NG.