HM Revenue and Customs (HMRC) is encouraging parents to sign up for Tax-Free Childcare during the summer holidays after new figures showed a record number of families are now using the support.
The latest statistics show 868,095 families benefited from Tax-Free Childcare during the 2025-26 tax year, while the UK Government provided almost £600 million in top-up payments through the scheme.
How Tax-Free Childcare works
Tax-Free Childcare helps working parents with the cost of approved childcare. For every £8 paid into an account, the UK Government adds £2. Eligible parents can receive up to £500 every three months for each child, worth up to £2,000 a year.
Families with a disabled child can receive up to £1,000 every three months, worth up to £4,000 annually. The money can be used to pay for approved childcare providers, including nurseries, childminders, before and after-school clubs and holiday activity clubs.
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." She added: "£2,000 is not a small amount and it can make a real difference. If you haven't signed up yet, don't miss out."
Eligibility criteria
Families could be eligible for Tax-Free Childcare if they have a child aged 11 or under. Support can continue until September 1 after a disabled child's 16th birthday. To qualify, parents and their partner, if they have one, must each earn at least the equivalent of 16 hours a week at the National Minimum Wage or National Living Wage on average and earn no more than £100,000 a year each.
Families cannot usually claim Tax-Free Childcare if they receive Universal Credit or childcare vouchers. Parents can use the online childcare calculator on GOV.UK to check what support they may be entitled to and whether they qualify for Tax-Free Childcare.
How to apply
HMRC said it takes just 20 minutes to apply online for a Tax-Free Childcare account. Once an account is opened, parents can deposit money and use it straight away or keep it in the account to use it whenever it’s needed. Any unused money in the account can be withdrawn at any time.
