HM Revenue and Customs (HMRC) is urging working parents to check if they qualify for Tax-Free Childcare, which can provide up to £2,000 per child each year towards approved childcare costs. The call comes ahead of the summer holidays, a period when childcare expenses typically rise.
New figures reveal that a record 868,095 families benefited from the scheme during the 2025-26 tax year. The UK Government provided nearly £600 million in top-up payments over that period.
How Tax-Free Childcare Works
Under the scheme, for every £8 a parent pays into a dedicated online account, the government adds £2. This means eligible families can receive up to £500 every three months per child, or up to £2,000 a year. For families with a disabled child, the top-up rises to £1,000 per quarter, totalling £4,000 annually.
The funds can be used to pay for approved childcare providers, including nurseries, childminders, before and after-school clubs, and holiday activity clubs.
Eligibility Criteria
To qualify, parents must have a child aged 11 or under. Support can continue until 1 September after a disabled child's 16th birthday. Both parents (or a single parent) must each earn at least the equivalent of 16 hours a week at the National Minimum Wage or Living Wage on average, and neither may earn more than £100,000 per year.
Families cannot usually claim Tax-Free Childcare if they receive Universal Credit or childcare vouchers.
HMRC Encourages Sign-Ups
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 costs of the summer holidays approaching. If you haven't signed up yet, don't miss out."
HMRC notes that applying online takes just 20 minutes. Once an account is opened, parents can deposit money and use it immediately or keep it in the account for future use. Unused funds can be withdrawn at any time.
How to Check Eligibility
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. More information about the scheme and how to apply is also available on the government website.
