Budget 2017: New tax-free childcare scheme to launch next month – what we know so far

Tax-Free Childcare is a Government-backed scheme which helps parents with the cost of childcare. For every 80p you put in, the state will add 20p – so it effectively gives you basic-rate tax back on what you pay, hence the scheme's name.

In total you'll be able to use the scheme to pay for childcare of up to £10,000 per child each year – so you could get an extra £2,000 per child each year.

The new initiative will replace the existing Childcare Vouchers scheme, which will close to new entrants in April 2018. But despite its imminent launch, there's very little official info about how it will work – the Treasury today told us more details would be released "soon".

We've dug into the details we could find to fill in some of the missing answers. For more info on how to boost your childcare budget, see the Childcare Costs Help guide.

Budget 2017: Other key stories

• New NS&I Investment Bond will pay 2.2%

• Self-employed face class 4 national insurance hike

• Cost of mobile roaming outside the EU set to rise

• Airbnb rentals may no longer qualify for tax break as Government plans 'Rent a Room' overhaul

• Tax-free dividend allowance to be slashed

• Technical education students to receive maintenance loans from 2019

• Smokers to be hit by new 'floor price' tax on cigarette packs

Who can sign up to the Tax-Free Childcare scheme?

The scheme's available to parents of children up to the age of 12 (or 17 for children with disabilities).

To qualify, you'll need to be in work and expecting to earn £115 or more per week (both of you if a couple). Unlike Childcare Vouchers, it'll be open to people who are self-employed too.

Where one parent earns or both parents earn more than £100,000, neither will be able to sign up. You also won't be eligible if you get childcare vouchers, childcare tax credits (or universal credit) or a student bursary towards childcare costs.

When can I sign up to the Tax-Free Childcare scheme?

Parents of the youngest children will be able to sign up from next month, with the scheme gradually being rolled out to all parents by the end of this year.

Parents who have more than one child will be able to sign up to cover all their children as soon as their youngest child becomes eligible.

How do I sign up to the scheme?

You'll need to set up an online account to be able to do this. The account will likely be offered through NS&I, the Government's savings provider, or one of the partners it works with, though you'll probably have to sign up for an account on the Gov.uk website.

As well as signing up to Tax-Free Childcare, you'll also be able to sign up for your additional free childcare hours through the same digital account. Working parents of three- and four-year-olds currently get 15 hours of free childcare, but from September 2017 this increases to 30.

How do I pay in to the scheme?

We don't really know yet – but it's likely that once you've opened the online account, you'll be able to just transfer money from your bank, as you would to any other 'savings' account.

How do I pay my provider through the scheme?

First, your childcare provider needs to register their details with the scheme – only those registered with a regulator such as Ofsted, the Early Years Register or the Childcare Register can do so. It's worth checking with your provider that they're registered or in the process of registering now, so they're ready for when you can open a Tax-Free Childcare account.

When you log in to your account you'll be able to see details of all registered providers. If your provider's on there, you'll be able to send payments directly through your account to the provider's bank account via the BACS system.

Can I spread the cost of childcare?

Yes, you'll be able to pay in more some months, for example to cover the cost of the extra childcare needed during holiday periods.

For more info on the scheme, plus other ways to cut childcare costs, see the Childcare Costs Help guide.