HMRC is urging thousands of parents to make sure they’re not missing out on tax-free childcare worth up to £2,000 a year. Tax-free childcare is a scheme where you receive a cash top-up from the Government.
It involves setting up an online account especially for paying for childcare, then for every £8 you pay in, the Government automatically adds in £2. If you’re eligible, you can get up to £500 every three months for each of your children.
This adds up to £2,000 over 12 months. For disabled children, the maximum amount you could get rises to £4,000. The money must be spent on a registered childcare provider, such as nurseries, nannies, after school clubs and play schemes.
In a post published on Easter Sunday on the official HMRC X/Twitter account, HMRC said: “Are you missing out on egg-cellent childcare savings? Chick out our Tax-Free Childcare scheme and sign up to unlock savings of up to £2,000 a year per child on approved childcare costs.”
Your child must be aged 11 or under and usually will need to live with you to claim tax-free childcare. They will remain eligible until September 1 after their 11th birthday. If your child is disabled, they may qualify until September 1 after their 16th birthday.
Your child will need to get Disability Living Allowance, Personal Independence Payment or Armed Forces Independence Payment, or be certified as blind or severely sight-impaired, to receive the higher rate.
In order to be eligible for the scheme, you need to be earning at least the minimum wage, for the equivalent of 16 hours a week, but under £100,000. This applies to yourself and your partner, if you’re in a couple.
This earnings threshold is the same if you’re self-employed, apart from if you’ve been self-employed for less than 12 months, in which case the minimum income requirement would not apply.
There are some circumstances where you can claim tax-free childcare if you’re not working. For example, if you’re on sick leave, annual leave, on shared parental, maternity, paternity or adoption leave, or if you’re in a couple and one of you is working, and the other claims Incapacity Benefit, Severe Disablement Allowance, Carer’s Allowance or contribution-based Employment and Support Allowance.
You can open a tax-free childcare account for free through the GOV.UK. But not everyone necessarily needs to pay for childcare in the first place. For example, parents can claim 15 or 30 hours free childcare a week, depending on the age of their child.
Working parents of nine-month-olds and two-year-olds can access 15 hours of free childcare a week and this will rise to 30 hours from September 2025. You must be in work and earning the equivalent of the national minimum wage or for 16 hours a week, but less than £100,000 a year.
All parents of three and four-year-olds are entitled to 15 hours free childcare a week as standard, regardless of whether they are in work. Working parents with children of these ages can claim the full 30 hours if they meet the earnings criteria. You can claim tax-free childcare on top of the 30 hours free childcare.
Finally, if you claim Universal Credit and you’re in work, you can claim back up to 85% of childcare costs, up to a maximum of £1,031.88 for one child or £1,768.94 for two or more children.
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