HMRC is urging UK families who have had children since 2015 to claim a valuable perk that could save them up to £4,000 annually on childcare costs. This call to action comes as new figures from the Labour Party government reveal that 542,700 families successfully reduced their childcare bills in December 2025 alone.
Significant Savings for Working Families
According to HMRC, more than £46 million in government funding assisted with childcare expenses for nearly 660,000 children during that period. The tax authority is now encouraging families to enroll in the Tax-Free Childcare scheme before arranging childcare for the upcoming Easter holidays.
Working families who sign up for Tax-Free Childcare can achieve substantial yearly savings: £2,000 per child up to age 11, and £4,000 for disabled children up to age 16. Myrtle Lloyd, HMRC’s Chief Customer Officer, emphasized the impact, stating, "£2,000 a year off childcare bills can make a big difference to household expenses."
How the Scheme Operates
Once a Tax-Free Childcare account is opened for each child, the government contributes £2 for every £8 deposited by the family. This allows families to save up to £500 every three months per child, or £1,000 quarterly if the child is disabled. These funds can be used to pay for any approved childcare provider.
Lloyd added, "There are plenty of childcare providers to choose from to suit your needs and your children’s interests – sign up today to make those savings for the Easter school holidays and for your plans for the rest of the year. Visit GOV.UK to find out more."
Eligibility Criteria and Deadlines
Families are eligible for Tax-Free Childcare if they have a child or children aged 11 or under. Eligibility ceases on 1 September following the child's 11th birthday, meaning parents of children born since 2015 could still benefit. For children with disabilities, support of up to £4,000 per year is available until 1 September after their 16th birthday, helping cover higher childcare costs often associated with disabilities.
To qualify, parents and their partners must earn, or expect to earn, at least the National Minimum Wage or Living Wage for an average of 16 hours per week. However, each individual must not earn more than £100,000 annually. Additionally, families cannot receive Universal Credit or childcare vouchers while participating in this scheme.
This initiative highlights the government's ongoing efforts to alleviate financial burdens on families, providing crucial support during school holidays and beyond. With the Easter break approaching, HMRC's reminder aims to ensure more households take advantage of these savings opportunities.
