The process takes 20 minutes and you can apply online, with the founding available within weeks
Working parents could pocket savings of up to £4,000 on childcare costs for the 2025/26 financial year by taking advantage of a scheme run by HM Revenue and Customs (HMRC). As the Easter holidays approach, families who haven’t yet signed up for Tax-Free Childcare could be missing out on annual savings of up to £2,000 per child, or £4,000 if their child is disabled.
Tax-Free Childcare can help foot the bill for 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, meaning for every £8 paid into their online account, they will automatically receive an additional £2 top up from the UK Government.
HMRC has said that it takes just 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. Once an account is opened, parents can deposit money immediately, so it is ready to be used whenever it is needed; and any unused money in the account can be withdrawn at any time.
Who qualifies for tax-free childcare?
Families could be eligible for Tax-Free Childcare if they meet certain criteria. A full list of the eligibility criteria is available on GOV.UK here..
How to apply.
You can apply for Tax-Free Childcare online, and if you’re 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’ll 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, this could be done through PAYE records.
However, if 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.
This could include the following:
- a statement from your accountant
- copies of invoices
- wage slips
- bank statements
You may also need to send:
- year-end payroll
- a letter from your tax agent or adviser confirming your salary has been paid and taxed
- annual wage slips
