HMRC officials are urging families in the UK to check to see if they are eligible for a scheme that could cut their annual bills by up to £2,000 – or even more in some cases.
Government tax officers say more families than ever before are taking advantage of Tax-Free Childcare to cut their childcare costs, after the government pumped almost £600 million into Tax-Free Childcare top-up payments in 2025-26.
The latest figures reveal a record 868,095 families are benefiting from the scheme and saved thousands on their childcare last year, as HM Revenue and Customs (HMRC) urges families to register ahead of the summer holidays.
Tax-Free Childcare is a government-funded top-up scheme designed to cover approved childcare costs 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 annually 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.”
The government says that once a Tax-Free Childcare account has been opened, for every £8 deposited by parents, the government adds a further £2. Parents can receive up to £500 every three months — or £1,000 if their child is disabled — to assist with their childcare expenses.
The funds are available to cover any approved childcare costs – including before or after-school clubs, a childminder or holiday activity clubs. They can also be used towards any specialist equipment a childcare provider may require for a disabled child.
Families could be eligible for Tax-Free Childcare if:
Tax-Free Childcare can be used alongside the free childcare hours offer, provided eligibility requirements are met.
