HMRC has urged Brits to check whether they qualify for a childcare tax perk that could save them up to £2,000 per child next year. The reminder was posted on social media over the festive period, with the tax authority encouraging families not to overlook support that could make a big difference to childcare bills in 2026.

In a post on X, HMRC wrote: “Don’t leave Tax-Free Childcare at the bottom of your Christmas to do list! Unlock a festive cash boost and check if you could save up to £2,000 per child today!” Tax-Free Childcare gives eligible working parents a government top-up worth £2 for every £8 they pay into an online childcare account.

It can be used to cover nursery costs, childminders, after-school clubs and holiday clubs, and offers up to £500 every three months per child, or £1,000 for children with disabilities.

The scheme has existed for several years, but HMRC says many families still do not realise they qualify.

According to the Government guidance, parents must be working, earning the equivalent of 16 hours per week at the National Minimum or Living Wage, and must not have an adjusted net income above £100,000.

The government website explains: “For every £8 you pay into this account, the government will pay in £2 to use to pay your childcare provider.

“You can get up to £500 every three months (up to £2,000 a year) for each of your children. This goes up to £1,000 every three months if a child is disabled.”

Parents must also be responsible for the child, be based in the UK, and not claim Universal Credit or Childcare Vouchers at the same time.

The scheme covers children aged 0 to 11, or up to 16 if they are disabled.

Those not currently working may still qualify if their partner is in work and they receive certain other benefits, including Incapacity Benefit, Carer’s Allowance, Severe Disablement Allowance or National Insurance credits for limited capability for work.

Parents must open an online childcare account on GOV.UK. They can then:

• Add their childcare provider if they are registered
• Deposit money into the account
• Receive the government top-up automatically
• Use the balance to pay approved childcare providers
• Reconfirm eligibility every three months

Parents can apply at different times depending on when they return to work. For example, those starting work between October 1 and January 31 should apply from September 1.

The scheme can also help cover specialist equipment for disabled children, such as mobility aids, if supplied through a childcare provider.

Tax-Free Childcare can be used for:

• Holiday clubs
• After-school and breakfast clubs
• Nurseries and childminders
• Nursery deposits, retainers during holidays, and extra charges such as lunches or trips (if part of the overall childcare cost)

It cannot be used for:

• School lunches
• School uniforms
• Private lessons during the school day
• School trips that form part of compulsory education

Parents can pay relatives such as grandparents only if they are registered childcare providers and the care takes place outside the child’s home.

The scheme cannot be used to pay a parent, step-parent or anyone with parental responsibility.

• Child Benefit is not affected by using Tax-Free Childcare.
• Parents cannot use it at the same time as Childcare Vouchers or Universal Credit.
• There is no minimum deposit, but the top-up is capped at £500 per quarter.
• If money is withdrawn, the government reclaims its top-up.
• Parents receive reminders to reconfirm eligibility before each deadline.

HMRC says thousands of families are still missing out, and encourages parents to check their status and speak to their childcare provider if they are unsure whether the scheme is accepted.

More information and eligibility checks are available on the Government website.