Can I Use Childcare Vouchers or Tax-Free Childcare to Pay My Nanny?
You can use both Childcare Vouchers and Tax-Free Childcare to pay a nanny – but only if your nanny is properly registered. And there are some important rules about which scheme you can use and when.
Here’s a clear, parent-friendly guide.
First things first: this is UK-specific
Everything in this article is based on UK rules and assumes your nanny is an employee on PAYE, not self-employed. Nannies who work in your home, on your schedule, are usually employees.
Always double-check your own situation with GOV.UK or a professional adviser if you’re unsure.
Quick answer: can I use Childcare Vouchers or Tax-Free Childcare to pay my nanny?
Yes – if:
Your nanny is a registered or approved childcare provider, and
They’ve joined the relevant scheme so they can receive payments
In England, that usually means your nanny is on the voluntary part of the Ofsted Childcare Register as a “home childcarer”.
In Scotland, Wales and Northern Ireland, they need to be registered with the local national regulator (Care Inspectorate, Care Inspectorate Wales, local early years team).
If your nanny is not registered with Ofsted (or the equivalent in your nation), you generally cannot use Childcare Vouchers or Tax-Free Childcare to pay them.
Childcare Vouchers: can I still use them for my nanny?
The Childcare Vouchers scheme is closed to new entrants – you can’t join if you didn’t already have vouchers before 4 October 2018.
However, if you’re already in a voucher scheme:
You can keep using your existing vouchers – there’s currently no deadline for spending them.
You can use them with any registered childcare provider, including an Ofsted-registered nanny (or equivalent in other nations).
To use vouchers with your nanny, you need:
A nanny who is registered/approved
A voucher provider that your nanny is willing to register with
Your nanny’s carer/provider number (from Ofsted or local regulator) to link their account
Your employer sacrifices part of your salary into vouchers; you then direct those vouchers to your nanny’s account with the voucher provider.
Tax-Free Childcare: how it works with nannies
Tax-Free Childcare (TFC) is the current main scheme for many working parents.
Key points:
For every £8 you pay into your online childcare account, the government adds £2 (20% top-up).
You can get up to £500 every 3 months per child (that’s £2,000 per year), or £1,000 per 3 months (£4,000 per year) if your child is disabled.
You use the account to pay approved childcare providers, including Ofsted-registered nannies who have signed up for the scheme.
To use Tax-Free Childcare with a nanny:
Your nanny registers with the regulator
In England, that’s the Ofsted voluntary register as a home childcarer.
They sign up as a provider with the Tax-Free Childcare scheme (so they can receive payments).
You open a Tax-Free Childcare account for each eligible child via GOV.UK.
You pay into the account, government tops it up, and you use that balance to pay your nanny.
Childcare Vouchers vs Tax-Free Childcare: can you use both?
Important bit:
You cannot be actively in both a Childcare Voucher salary-sacrifice scheme and Tax-Free Childcare at the same time.
Once you tell your employer you’re moving to Tax-Free Childcare, you can’t re-join their voucher scheme later.
However:
If you already have a pot of existing vouchers, you can still spend them, and GOV.UK notes you can use them alongside Tax-Free Childcare when making payments to a provider – you just can’t keep earning new vouchers through salary sacrifice.
Because the rules are a bit fiddly, it’s worth using the official Childcare Choices calculator to see which scheme is better for you.
Does my nanny have to register with Ofsted?
Legally, nannies don’t have to register with Ofsted – childcare in the child’s own home is exempt from compulsory registration.
But if your nanny isn’t registered:
You cannot usually claim Tax-Free Childcare, Childcare Vouchers, or some other help with childcare costs for what you pay them.
That’s why many nannies choose to join the voluntary register – it makes them more employable, and helps families access government support.
How to talk to your nanny about registering
If your nanny isn’t yet registered but is open to it, you can say something like:
“We’d love to be able to use Tax-Free Childcare/Childcare Vouchers towards your pay. To do that, you’d need to be registered with Ofsted as a home childcarer. Would you be open to us supporting you through that process?”
They’ll need to:
Meet basic safeguarding and suitability requirements (DBS check, references etc.)
Complete an Ofsted application and pay the fee
Keep their registration up to date
Many families are happy to cover the registration cost because the ongoing savings from Tax-Free Childcare or vouchers easily outweigh it over time.
What can go wrong (and how to avoid it)
A few common pitfalls:
Paying a non-registered nanny and assuming you’ll be able to use TFC or vouchers later
Reality: you can’t claim for unregistered care, and HMRC can ask you to repay support if you’ve used it incorrectly.
Switching schemes without checking which is best
Once you leave vouchers for TFC, you can’t go back. Always run the childcare calculator first.
Nanny not fully set up in time
If your nanny hasn’t finished their registration or signed up as a TFC provider, your payments may be delayed. It’s best to sort the admin before you rely on the support.
Where Hirelo fits in
Childcare Vouchers and Tax-Free Childcare help you fund your nanny’s pay. You still need to:
Run PAYE payroll correctly
Handle tax, National Insurance, and pensions
Make sure your nanny’s payslips match what you’ve actually paid from vouchers/TFC/cash
Hirelo sits on the payroll side:
You agree your nanny’s gross salary
Hirelo calculates tax, NI and pensions, and produces payslips
You can then use vouchers or Tax-Free Childcare to help fund those payments, knowing the employer side is fully compliant
Think of it as:
HMRC schemes help with the cost. Hirelo helps with the compliance.
Quick checklist
Before relying on Childcare Vouchers or Tax-Free Childcare for your nanny, check:
✅ Is my nanny registered/approved with Ofsted (or equivalent)?
✅ Have they signed up to accept vouchers or Tax-Free Childcare payments?
✅ Do I understand which scheme (vouchers vs TFC vs tax credits/UC) is best for us?
✅ Is their payroll set up correctly so everything ties together?
Once those boxes are ticked, you can reduce your childcare costs and keep everything clean and legal.