The UK government has allocated nearly £600 million to support families with young children through the Tax-Free Childcare scheme, which is already benefiting over 868,000 families. HMRC is urging eligible parents to apply promptly to save on childcare costs ahead of the summer holidays.
How the Scheme Works
For every £8 parents pay into a dedicated childcare account, the government adds £2. The maximum top-up is £500 per child every three months, up to £2,000 per year. For children with disabilities, the limit doubles to £1,000 every three months, or £4,000 annually.
Myrtle Lloyd, HMRC’s Chief Customer Officer, said: “I’m so pleased these figures show more families than ever are using Tax-Free Childcare to save on their bills. £2,000 is not a small amount and it can make a real difference – especially with the childcare void of the summer holidays approaching. If you haven’t signed up yet, don’t miss out, go to GOV.UK to do it today.”
Eligibility and Usage
The scheme applies to children aged 11 or under, or up to 16 if the child has a disability. Parents must set up a childcare account, which both they and the government contribute to, and use the funds to pay approved childcare providers. These include registered childminders, nurseries, nannies, after-school clubs, play schemes, and holiday clubs. Providers must be signed up to the Tax-Free Childcare scheme.
Payments can be made via direct debit, standing order, or bank transfer, and appear in the account within one working day, with the government top-up added simultaneously. Parents must log in every three months to confirm ongoing eligibility; failure to do so will stop the payments.
Impact and Next Steps
HMRC figures show that 868,095 families have already saved thousands of pounds through the scheme. Parents are encouraged to check their eligibility and apply at GOV.UK to benefit before the summer break.
