HMRC has launched a fresh appeal for parents to claim Tax-Free Childcare and Child Benefit, highlighting that significant sums of government support are going unclaimed. The Tax-Free Childcare scheme provides up to £500 every three months for each child under 11, up to £2,000 per year, and up to £1,000 every three months for disabled children, up to £4,000 annually. According to Martin Lewis, founder of Money Saving Expert, it takes roughly 30 minutes to apply for Tax-Free Childcare and around 800,000 parents are missing out, as reported by Daily Express - Finance.
Tax-Free Childcare is a UK-wide scheme covering England, Scotland, Wales, and Northern Ireland, open to all parents of children under 12 (or under 17 if disabled). To apply, parents must open a Tax-Free Childcare account online. Eligibility requires that the parent (and their partner, if applicable) is working and not receiving support through Universal Credit. Most parents who are eligible for Universal Credit can save more money using the childcare elements of that benefit instead of Tax-Free Childcare. Usually, both parents in a couple must work on an employed or self-employed basis and have an income of at least £2,643 (2026/27) each every three months. Recently self-employed people are allowed start-up periods where this income level does not have to be met, or they can use an average over the tax year. Periods on maternity leave, sick leave, paternity leave, parental leave, adoption leave, and shared parental leave count as being in work for any older children already enrolled in the scheme. However, eligibility is limited to the last 31 days of leave where parents are claiming for a new child whose birth or adoption led to the time off. The household must have one child under the age of 12, or a child with a disability under the age of 17. The scheme runs according to the school year, so disabled children are eligible until the September after their 16th birthday, while other children are eligible until the September after their 11th birthday. Parents pay money into a childcare account, which the government tops up by 25%. For every £8 put into the account, the government puts in £2, which can be used to pay the childcare provider. If a parent is due to start work or return to work, they do not have to wait until they start work to apply.
Child Benefit rates as of April 6 are £27.05 per week for the first child and £17.90 for additional children, according to multiple reports. Parents can claim Child Benefit for children under 16, or under 20 if in approved education or training. HMRC reminded parents that Child Benefit can continue for teenagers aged 16-19 in full-time education or approved training until they turn 20. Payments stop automatically in August after the child's 16th birthday unless parents notify HMRC of continued education or training. Qualifying education includes A levels, T levels, GCSEs, Scottish Highers, NVQs up to level 3, home education, study programmes, and pre-apprenticeships. Full-time education is defined as more than an average of 12 hours per week of supervised study or course-related work experience.
HMRC confirmed early Child Benefit payments in May due to bank holidays: payments due on May 4 will be paid on May 1, and those due on May 25 will be paid on May 24. Child Benefit payments are usually made every four weeks on a Monday or Tuesday, according to multiple reports.
It takes roughly 30 minutes to apply for Tax-Free Childcare and around 800,000 parents are missing out.
HMRC warned that Child Benefit claimants earning over £60,000 per year may have to pay back some or all of their Child Benefit via the High Income Child Benefit Charge. This charge applies to the higher earner in the household and can result in a tax charge that claws back the benefit.
Child Benefit also provides National Insurance credits for parents, protecting their State Pension entitlement. This is particularly important for parents who take time out of work to care for children, as it helps maintain their National Insurance record.
HMRC issued a reminder on April 5 via X about Tax-Free Childcare, urging parents to check their eligibility. HMRC also urges parents earning under £80,000 to check Child Benefit eligibility; over 1.4 million have claimed online but many more may be missing out.
The exact number of families missing out on Tax-Free Childcare remains unknown, as does the total unclaimed amount. It is also unclear how many families are affected by the High Income Child Benefit Charge. Additionally, there are no confirmed plans to simplify the application process for Tax-Free Childcare, and the interaction between Tax-Free Childcare and other childcare support like Universal Credit can be complex for parents to navigate.