The scheme operates on a top-up basis, with the government contributing £2 for every £8 deposited into the account
Parents across the UK are being encouraged to open Tax-Free Childcare accounts to save on childcare costs during the Easter holidays and beyond. The scheme, promoted by HMRC, provides a significant financial boost for working parents by offering a government top-up for approved childcare services. Under the Tax-Free Childcare scheme, parents can save up to £2,000 per year per child, with an increased limit of £4,000 for disabled children. These funds can be used for a variety of childcare options, including before-and-after school clubs, childminders, and activity clubs during school holidays. This flexibility makes the scheme particularly beneficial for families looking to manage childcare costs during the Easter break and other holiday periods.
The scheme operates on a top-up basis, with the government contributing £2 for every £8 deposited into the account. This means that parents can receive up to £500 every three months to help cover their childcare expenses. The financial support provided by the government can significantly reduce the burden of childcare costs for many families.
Recent figures highlight the growing popularity of the Tax-Free Childcare scheme. In December 2024, 34,440 families in Scotland benefited from the scheme, saving thousands on their childcare bills. This represents an increase of nearly 5,000 families compared to the previous year. Across the UK, parents received a total of £49.7 million in government cash to reduce their childcare costs in December alone.
The eligibility criteria for the Tax-Free Childcare scheme are designed to support working families. Families with children aged 11 or under, or disabled children aged up to 16 years, may qualify for the scheme. Both parents must earn at least the National Minimum Wage or Living Wage for an average of 16 hours a week and cannot earn more than £100,000 per year. Families receiving tax credits, Universal Credit, or childcare vouchers are not eligible for the scheme.
One of the key advantages of the Tax-Free Childcare scheme is its compatibility with other childcare support initiatives. Families that meet the eligibility criteria can use the scheme alongside the free hours offer (15 or 30 hours) to further reduce their childcare costs. This combination of support options provides a comprehensive solution for many working parents struggling to balance work and childcare responsibilities.
The Easter holidays present an ideal opportunity for parents to explore the benefits of the Tax-Free Childcare scheme. With the added costs of holiday childcare, the financial support provided by the government can make a significant difference. By opening a Tax-Free Childcare account, parents can ensure they are making the most of the available support and reducing their childcare costs during this busy period. HMRC continues to encourage working parents to take advantage of the Tax-Free Childcare scheme. The financial benefits, combined with the flexibility of approved childcare options, make it a valuable resource for families. As more families discover the advantages of the scheme, the number of beneficiaries is expected to continue growing.
Across the UK, parents received a total of £49.7 million in government cash to reduce their childcare costs in December alone. Families with children aged 11 or under, or disabled children aged up to 16 years, may be eligible for the scheme
The Tax-Free Childcare scheme offers a practical and financially beneficial solution for working parents. With the Easter holidays approaching, now is the perfect time for parents to consider opening a Tax-Free Childcare account and taking advantage of the government’s top-up offer. By doing so, they can enjoy significant savings on childcare costs and better manage their family finances.
