HMRC reveals record number of families now using tax trick worth up to £2,000 a year

A record 868,095 families are now benefiting from Labour's Tax-Free Childcare scheme, with HM Revenue and Customs (HMRC) revealing it contributed almost £600million in top-up payments during the 2025-26 tax year.The latest figures show more households than ever before are using the scheme to help reduce childcare costs.The tax authority is encouraging more eligible families to check whether they qualify for support, particularly with the summer holidays approaching when childcare expenses can increase significantly for working parents.Under the scheme, the Government adds £2 for every £8 paid into a Tax-Free Childcare account by parents. TRENDING Stories Videos Your Say Eligible families can receive up to £500 every three months towards childcare costs, providing savings of up to £2,000 a year for each child.Families with disabled children can receive enhanced support, with Government contributions of up to £1,000 every three months, amounting to a maximum annual payment of £4,000 per child.The funds can be used to pay for approved childcare providers, including nurseries, childminders, before and after-school clubs and holiday activity schemes.Parents of disabled children can also use the money to help cover the cost of specialist equipment required by their childcare provider.Myrtle Lloyd, HMRC's chief customer officer, said: I'm so pleased these figures show more families than ever are using Tax-Free Childcare to save on their bills.£2,000 is not a small amount and it can make a real difference especially with the childcare void of the summer holidays approaching.If you haven't signed up yet, don't miss out, go to GOV.UK to do it today.HMRC said opening a Tax-Free Childcare account takes around 20 minutes online and parents can withdraw any unused funds at any time, providing flexibility over how they manage their childcare spending.LATEST DEVELOPMENTSAndy Burnham's property tax raids set to leave hundreds of thousands of Britons £1k worse offInheritance tax raid to target 'families with substantial pension savings' - how to avoid'Rachel Reeves has copied Gordon Brown' after pocketing £9.8bn in stealth taxesSupport for disabled children continues until September 1 after they turn 16.Parents, or a single parent in lone-parent households, must each earn at least the equivalent of 16 hours a week at the National Minimum Wage or National Living Wage on average.There is also an upper earnings threshold, with each parent required to earn less than £100,000 a year to remain eligible.Families receiving Universal Credit or using childcare vouchers are generally unable to claim Tax-Free Childcare at the same time.Parents can check their eligibility and submit an application through GOV.UK, which also provides an online childcare calculator to help families understand what support they may be entitled to receive.The Tax-Free Childcare scheme can also be used alongside free childcare hours for families who meet the relevant eligibility criteria, potentially allowing parents to reduce their childcare bills further.The latest figures suggest growing awareness of the scheme among working families as childcare costs remain a significant expense for many households across the UK. Our Standards: The GB News Editorial Charter