Families could save up to £2,000 a year on childcare costs with Tax-Free Childcare.

With the new school term starting, HM Revenue and Customs (HMRC) is reminding families to open a Tax-Free Childcare account today.

Families can use their Tax-Free Childcare account to pay for any approved childcare including holiday clubs, breakfast and after school clubs, child minders and nurseries.   

The scheme provides working families, with children up to the age of 11, or 16 if their child has a disability, up to £2,000 a year per child or £4,000 a year if their child is disabled.

 

For every £8 paid into a Tax-Free Childcare account, families automatically receive the government top up of £2.

Families can save up to £500 every 3 months for each child or £1,000 if their child is disabled.

More than 400,000 families used the scheme in September 2022 and benefited from the government paying towards childcare costs.

A full list of the eligibility criteria is available on GOV.UK.

Myrtle Lloyd, HMRC’s Director General for Customer Services, said: “Starting back to school and arranging childcare for the term ahead can be costly for working families.

“Tax-Free Childcare offers financial help so families can save on the cost of childcare. Search Tax-Free Childcare on GOV.UK and sign up online today.”

Opening a Tax-Free Childcare account online is straightforward and can be done in about 20 minutes. Money can be deposited at any time, 365 days a year, to be used straight away or left in the account and used whenever it is needed. Unused money in the account can be withdrawn at any time.