HMRC has confirmed that 601,620 families received a share of £55.7 million in government top-ups through Tax-Free Childcare in June, with each family getting an average of £93 added to their savings pot. The scheme helps working families save up to £2,000 per year for each child up to age 11, or £4,000 per year for disabled children up to age 16.
How Tax-Free Childcare works
Tax-Free Childcare is designed to ease the financial burden of childcare for working parents. For every £8 a family deposits into their Tax-Free Childcare account, the government adds £2, up to a maximum of £2,000 per child per year. For families with disabled children, the maximum is £4,000 per year.
Eligibility requires that parents or partners earn at least the National Minimum Wage or Living Wage for 16 hours a week on average. Additionally, each parent must not earn more than £100,000 per annum, and they must not be receiving Universal Credit or childcare vouchers from the Department for Work and Pensions (DWP).
HMRC urges families to sign up
Myrtle Lloyd, HMRC’s Chief Customer Officer, said: "Paying for childcare while you work doesn’t have to be a nightmare for your bank balance this Hallowe’en. Tax-Free Childcare can make a real difference. Go to GOV.UK to find out more today."
HMRC is encouraging employed parents to sign up now to benefit from savings on Hallowe’en half term childcare plans and for the year ahead. The scheme is available for children aged 11 or under, with eligibility ending on 1 September after their 11th birthday. For disabled children, the scheme continues until 1 September after their 16th birthday.
Important details for applicants
Each eligible child requires their own Tax-Free Childcare account. If a family has more than one eligible child, they must register a separate account for each child. The government top-up is applied to deposits made for each child individually, not per household.
The latest figures show that in June alone, 601,620 families benefited from the scheme, receiving a combined £55.7 million in top-ups. This represents an average of £93 per family, providing a significant boost to household budgets during a period of rising childcare costs.
HMRC’s announcement comes as part of a broader push to increase uptake of the scheme, which many eligible families have not yet claimed. The tax authority has reiterated that signing up is straightforward and can be done online via GOV.UK. For families planning ahead, the scheme offers ongoing savings throughout the year, helping to manage the cost of childcare for working parents.
