HMRC is calling on numerous parents to ensure they are not overlooking tax-free childcare benefits of up to £2,000 per year. Tax-free childcare is a program where the government provides a cash boost to parents.
The process involves creating an online account dedicated to childcare payments. For every £8 contributed, the government adds £2 automatically. Eligible individuals can receive up to £500 every three months for each child, totaling £2,000 annually. In the case of disabled children, the maximum benefit can reach £4,000. The funds must be used with registered childcare providers like nurseries, nannies, after-school clubs, and play schemes.
In a recent post on Easter Sunday on the official HMRC Twitter account, HMRC emphasized the childcare savings available through the Tax-Free Childcare scheme, encouraging parents to sign up and access savings of up to £2,000 per child annually on approved childcare expenses.
Children must be 11 years old or younger and typically reside with the claimant to qualify for tax-free childcare. Eligibility lasts until September 1 following the child’s 11th birthday, extending to September 1 after their 16th birthday for disabled children.
To qualify for the scheme, applicants must earn at least the national minimum wage for 16 hours weekly, with a joint income below £100,000 for couples. This criterion applies to both partners in a couple unless one partner is self-employed for less than 12 months, in which case the income requirement does not apply.
There are exceptions allowing individuals to claim tax-free childcare even if not actively working, such as during sick leave, annual leave, shared parental leave, maternity, paternity, or adoption leave. Additionally, if one partner is working while the other claims specific benefits, tax-free childcare may still be accessible.
Individuals can register for a tax-free childcare account for free via GOV.UK. However, not everyone may require paid childcare services; for instance, parents may be eligible for 15 or 30 hours of free childcare per week based on their child’s age.
Working parents with nine-month-olds and two-year-olds can access 15 hours of weekly free childcare, increasing to 30 hours from September 2025, provided they meet specific income criteria. All parents of three and four-year-olds are entitled to 15 hours of free childcare weekly, with working parents eligible for 30 hours if they meet the earnings threshold. Tax-free childcare can be claimed in addition to the 30 hours of free childcare.
Lastly, individuals claiming Universal Credit while employed can claim back up to 85% of childcare expenses, with a maximum reimbursement of £1,031.88 for one child or £1,768.94 for two or more children.