HMRC has issued a new statement for families today, Friday, June 19, saying 'sign up today' to cut bills. Record numbers of families are now utilising Tax-Free Childcare to reduce their childcare expenses, with the government providing nearly £600 million in Tax-Free Childcare top-up payments during 2025-26.
Recent statistics reveal that a record-breaking 868,095 families are taking advantage of the scheme and made substantial savings on their childcare costs last year. HM Revenue and Customs (HMRC) is urging families to register and start saving before the summer holidays.
Tax-Free Childcare is a government-funded top-up programme designed to help pay for approved childcare for children aged 11 or under, or up to 16 years old if the child has a disability. Working parents can save up to £2,000 per year per child or £4,000 if their child is disabled.
HMRC's Chief Customer Officer Myrtle Lloyd 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."
Once a Tax-Free Childcare account is opened, for every £8 deposited by parents, the government tops it up by £2. Parents can receive up to £500 (or £1,000 if their child is disabled) every 3 months to help pay their childcare costs.
The funds are available to cover any approved childcare costs – including before or after-school clubs, a childminder or a holiday activity club. They can also be used towards any specialist equipment a childcare provider might require for a child with a disability.
Eligibility for Tax-Free Childcare
Families could be eligible for Tax-Free Childcare if:
- they have a child or children aged 11 or under. They stop being eligible on 1 September after their 11th birthday. If their child has a disability, they receive up to £4,000 a year until 1 September after their 16th birthday.
- do not receive Universal Credit or childcare vouchers.
- the parent and their partner (if they have one) earn, or expect to earn, at least the National Minimum Wage or Living Wage for 16 hours a week, on average.
- each earn no more than £100,000 per annum.
Families can check their eligibility and apply on GOV.UK. Tax-Free Childcare can be used alongside the free childcare hours offer, provided eligibility criteria are satisfied.
