HMRC has begun contacting registered childcare providers inviting them to sign up online to make sure that they are eligible to receive payments from the tax-free childcare accounts being introduced from early 2017.

In an update to their guidance, Tax-Free Childcare: Top things childcare providers should know, HMRC confirm that letters will be sent out to providers during September and October 2016.

Only approved childcare providers who are registered with a regulator such as Ofsted can receive Tax-Free Childcare payments, and only if they sign up for Tax-Free Childcare online.  Parents will be able to check online whether or not their chosen provider has signed up.

Parents will be able to open the tax-free childcare accounts for children up to the age of 12 from early 2017 onwards, with priority being given to parents of younger children first.  

For every 80p that parents or others contribute to these new accounts, the government will contribute an additional 20p, up to a total government contribution of £2,000 per child per year.  Higher age and contribution limits apply for parents of children with disabilities.

Our tax-free childcare guide has more details about the accounts and eligibility criteria for parents.