HMRC issues ‘childcare savings’ alert for parents (2025)

Some parents could be eligible for extra financial support to help them care for their child

Working parents are being urged to check if they could save up to £2,000 on childcare for the next financial year. HM Revenue and Customs (HMRC) has warned that many parents could be missing out on tax-free childcare which could save parents £2,000 a year per child or £4,000 if their child has a disability.

It can help cover the cost of approved childcare for children aged 11 or under, or up to 16 if the child has a disability. Parents can receive up to £500 (or £1,000 if their child is disabled) every three months, which means for every £8 paid into their online account, they will automatically receive an additional £2 top up from the UK Government.

It only takes 20 minutes to apply online for a Tax-Free Childcare account and it can be used to help cover the cost of a child's nursery, childminder, breakfast or after school club or holiday activity club.

Writing on X, HMRC said: "Are you missing out on childcare savings? Check out our Tax-Free Childcare scheme and sign up today to unlock savings of up to £2,000 a year per child on approved childcare costs, including wraparound childcare."

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can deposit money immediately, so it is ready to be used whenever it is needed; and unused money in the account can be withdrawn at any time.

Eligibility for the scheme

Families could qualify for Tax-Free Childcare if they:

• Do not receive Tax Credits, Universal Credit or childcare vouchers
• Each earn no more than £100,000 per annum
• Have a child or children aged 11 or under. They stop being eligible on September 1 after their 11th birthday. If their child has a disability, they may get up to £4,000 a year until September 1 after their 16th birthday
• Earn, or expect to earn, at least the National Minimum Wage or Living Wage for 16 hours a week, on average

How to apply

You can apply for Tax-Free Childcare online. If you are married or in a civil partnership and living together, or not married or in a civil partnership but cohabiting as though you are, you must include your partner in your application.

You woll also need your National Insurance number, Unique Taxpayer Reference (UTR) if you're self-employed, the UK birth certificate reference number for any children you're applying for, and the date you started or are due to start work.

There are also special rules if you're registered as a director with HMRC. You will need to show evidence that you meet the minimum income requirements that prove you're eligible for the scheme which can be done through PAYE records.

In the case that you do not submit regular PAYE information then you may have to provide additional evidence that shows you are working and expect to meet the minimum income requirements for the next three months.

A statement from your accountant, copies of invoices, wage slips, and bank statements may be required. Additionally, you might need to provide year-end payroll, a letter from your tax agent or adviser confirming your salary has been paid and taxed, and annual wage slips.

Full details of how you can apply can be found here.