HM Revenue and Customs (HMRC) is encouraging families to sign up for Tax-Free Childcare, which offers up to £2,000 a year per child towards approved childcare costs. The call comes as new figures reveal that a record 868,095 families used the scheme during the 2025-26 tax year, with the UK Government providing nearly £600 million in top-up payments.
The scheme works by adding £2 for every £8 paid into a Tax-Free Childcare account. Eligible parents can receive up to £500 every three months for each child, or up to £1,000 if the child is disabled. The funds can be used for 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. £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.'
To qualify, parents and their partner must each earn at least the equivalent of 16 hours a week at the National Minimum Wage or National Living Wage, and earn no more than £100,000 per year each. The scheme applies to children aged 11 or under, or up to 16 for disabled children. Families receiving Universal Credit or childcare vouchers are usually not eligible.
Parents can check their eligibility using the online childcare calculator on GOV.UK. HMRC notes that applying for a Tax-Free Childcare account takes just 20 minutes, and funds can be used immediately or withdrawn at any time.
