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HMRC urges working parents to claim £2,000 a year on childcare in tax-free scheme

HMRC urges working parents to claim £2,000 a year on childcare in tax-free scheme

20 February 2025  

Working parents may be able to get help towards childcare costs, saving up to GBP2,000 a year.

Families can make the saving over the 2025/26 financial year by taking advantage of a scheme run by HM Revenue and Customs (HMRC). With the Easter holidays just weeks away, parents yet to sign up for Tax-Free Childcare could be missing out on annual savings of up to GBP2,000 per child, or GBP4,000 if their child is disabled.

Tax-Free Childcare can help pay for approved childcare for children aged 11 or under, or up to 16 if the child has a disability. Parents can receive up to GBP500 (or GBP1,000 if their child is disabled) every three months, which means for every GBP8 paid into their online account, they will automatically receive an additional GBP2 top up from the UK Government.

HMRC says it takes just 20 minutes to apply online for a Tax-Free Childcare account. And it can be used to help pay for a child's nursery, childminder, breakfast or after school club or holiday activity club, reports the Daily Record.

Once an account is opened, parents can deposit money immediately, so it is ready to be used whenever it is needed. Unused money in the account can be withdrawn at any time.


Who is eligible 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 September 1 after their 11th birthday. If their child has a disability, they may get up to GBP4,000 a year until September 1 after their 16th birthday

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 GBP100,000 per annum

Do not receive Tax Credits, Universal Credit or childcare vouchers

A full list of the eligibility criteria is available on GOV.UK here.

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