What is the Tax-Free Childcare scheme?

The Tax-Free Childcare scheme is a UK government initiative that helps working families save on childcare costs by providing a 25% top-up on money paid into an online account for approved childcare.

Who is eligible for the Tax-Free Childcare scheme?

Working families with children aged 11 or younger, or with disabled children up to 16, may qualify if each parent earns at least the equivalent of 16 hours' work a week at the National Minimum or National Living Wage and neither earns more than £100,000 a year.

How much support can families receive through the scheme?

Families can receive up to £2,000 per child annually, or £4,000 for children with disabilities, to help with childcare costs.

Can the scheme be used with other government childcare support?

Yes, the scheme can be used alongside the government's funded childcare hours, provided the family meets the eligibility requirements.

How can parents sign up for the Tax-Free Childcare scheme?

Parents can sign up for the scheme by visiting GOV.UK and searching for Tax-Free Childcare to check their eligibility and create an account.

This Government Childcare Scheme Could Save Working Parents Nearly £100 a Month—Many Still Haven't Signed Up

Thousands of working families could be missing out on government support worth up to £2,000 per child each year, with new figures showing that users of the UK's Tax-Free Childcare scheme save an average of roughly £100 a month. HM Revenue and Customs (HMRC) is urging parents to check whether they qualify, with government top-ups of up to £2,000 a year available for each child, rising to £4,000 for a disabled child.

How the Scheme Works

Tax-Free Childcare gives parents access to an online account that helps pay for approved childcare. Every £8 parents pay in is topped up with £2 from the government, giving them 25% more to spend on approved childcare. Families can receive up to £500 in government top-ups every three months for each child or up to £1,000 for a disabled child.

A separate account can be opened for each child until they reach 11 years old. Meanwhile, children with disabilities remain eligible until 1 September following their 16th birthday. The money can be used to pay nearly 75,000 registered childcare providers across the UK, including nurseries, childminders, breakfast and after-school clubs, as well as holiday childcare programmes, making it useful all year round.

Families can pay into the account whenever they choose and either spend the balance immediately or save it for future childcare expenses. They can withdraw any unused balance at any time.

More Families With Older Children Are Signing Up

Although Tax-Free Childcare has traditionally been associated with younger children, recent HMRC data also shows that more families with older children are now signing up. The number of families getting support for children aged eight and above has increased by more than 20% compared with the previous year. The increase highlights growing awareness that the scheme can be used for breakfast clubs, after-school clubs, and holiday childcare.

HMRC's Chief Customer Officer, Myrtle Lloyd, said eligible parents should not miss the opportunity to benefit from Tax-Free Childcare. 'Tax-Free Childcare can help with your summer childcare plans and, looking to the term ahead, with whatever type of care you require for your child,' Lloyd said. 'If you haven't signed up already, do it today so you don't miss out. Go to GOV.UK and search for Tax-Free Childcare.'

According to the tax authority, the scheme can be used along with the government's funded childcare hours, as long as families fulfil the applicable eligibility requirements.

Who Can Claim the Support

Working families may qualify for Tax-Free Childcare if they meet the following criteria:

Have a child aged 11 or younger. Eligibility ends on 1 September after the child's 11th birthday.
Have a disabled child. Support is available until 1 September after their 16th birthday.
Each parent (or their partner, if applicable) must expect to earn at least the equivalent of 16 hours' work a week at the National Minimum or National Living Wage.
Neither parent can earn more than £100,000 a year.
Families cannot usually receive Tax-Free Childcare at the same time as Universal Credit, tax credits, or childcare vouchers.

As childcare costs continue to rise, HMRC is encouraging parents to check whether they are eligible for the scheme. Those who qualify could receive hundreds of pounds in government support each year, helping to ease the financial burden of childcare.