Latest figures from the tax office show that in March 2025, 579,560 families in the UK used the scheme to save on their annual childcare bills – this is an increase of 81,770 families compared to March last year
Over 800,000 households have received an up to £4,000 boost through HMRC’s Tax-Free Childcare scheme. According to official data, 826,000 families received government top-ups towards their childcare bills worth £632million between 2024 and 25.
However, thousands more families could be eligible for the scheme, and HMRC is urging parents to sign up now for the summer. According to recent data, around 800,000 eligible families are eligible but aren’t currently using this benefit.
The childcare scheme is an online account which parents and guardians pay into, and then they receive a top up payments from the Government.
For every £8 you pay into the account, the Government will automatically add in £2 which you can put towards your childcare costs. Childcare allowed under the scheme must be a registered provider such as nurseries, nannies, after school clubs and play schemes.
The scheme helps pay for childcare for children up to the age of 11 years, or up to 16 if the child has a disability. If you’re eligible, you can get up to £500 every three months – up to £2,000 a year – for each of your children. If your child is disabled, you could receive £1,000 or up to £4,000.
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Latest figures from the tax office show that in March 2025, 579,560 families in the UK used the scheme to save on their annual childcare bills. This is an increase of 81,770 families compared to March last year.
Myrtle Lloyd, HMRC’s Director General for Customer Services, said: “Summer can be an expensive time if you have children. Whatever you’re planning, Tax-Free Childcare can give your plans a welcome financial boost. Go to GOV.UK to start saving today.”
To be eligible for the scheme, you must earn at least the minimum wage, for the equivalent of 16 hours a week. If you’re in a couple, your partner must also earn this.
Self-employed workers are also eligible if they earn this amount too. Both you and your partner also have to earn less than £100,000 a year to qualify.
This scheme is open to working families so you will not be able to get this help if you are claiming Tax Credits, Universal Credit or childcare vouchers.
However, there are some exceptions for those who are not working. For example, you may still be able to claim if one of you is working and the other gets Incapacity Benefit, Severe Disablement Allowance, Carer’s Allowance or Employment and Support Allowance (ESA).
HMRC says it takes around 20 minutes to apply for the scheme and you can do this through the Gov.uk website. Once an account is opened, parents can deposit money immediately, so it is ready to be used whenever it is needed; and unused money in the account can be withdrawn at any time.
Going forward, you will need to make sure the detail on the account are up to date every three months to keep receiving the Government top ups.
It’s also important to note that each eligible child requires their own Tax-Free Childcare account. If families have more than one eligible child, they will need to register an account for each child. The government top-up is then applied to deposits made for each child, not the household.
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