HM Revenue and Customs (HMRC) is urging working families to register for Tax-Free Childcare to ease the financial burden of summer holiday activities.
According to the tax authority, the scheme helped almost 826,000 families save up to £2,000 per child, or £4,000 for a disabled child, during the 2024-25 tax year.
With the school summer break approaching, parents can use the Government support to pay for holiday clubs and childcare activities.
The initiative forms part of the Labour Government's Plan for Change aimed at increasing household disposable income.
Families could get a £2,000 boost thanks to a HMRC scheme
GETTY
Tax-Free Childcare provides financial assistance for approved childcare costs, including nurseries, wraparound care and after-school clubs throughout the year.
The scheme has seen significant growth, with 579,560 families utilising it in March 2025 - an increase of 81,770 compared to March 2024.
Parents receive £2 from the government for every £8 they deposit towards childcare expenses.
Myrtle Lloyd, HMRC's Director General for Customer Services, said: "Summer can be an expensive time if you have children.
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HMRC is calling on families to apply for support
Getty"Whatever you're planning, Tax-Free Childcare can give your plans a welcome financial boost. Go to GOV.UK to start saving today."
The scheme covers various childcare options, from nurseries for younger children to holiday clubs for older ones during the lengthy summer break.
Families can receive up to £500 every three months per child aged 11 or under, or £1,000 quarterly for disabled children up to age 16.
The maximum annual benefit reaches £2,000 per child, or £4,000 for those with disabilities.
To qualify, parents must each earn at least the National Minimum Wage for 16 hours weekly but no more than £100,000 annually.
Those receiving Universal Credit or childcare vouchers are ineligible.
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Households are struggling with childcare costs
GETTYThe account offers flexibility - funds can be used immediately or saved for future needs, with unused money withdrawable at any time.
Tax-Free Childcare can be combined with free childcare hours where eligible.
Parents can check eligibility and register at GOV.UK. Each eligible child requires their own Tax-Free Childcare account.
If households have more than one eligible child, they will need to register an account for each child. It should be noted that this HMRC top-up is then applied to deposits made for each child, not household.
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