HMRC has issued a reminder to working parents about the Tax-Free Childcare scheme, which 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. The scheme is open to parents of children under 12, or under 17 if disabled, and covers England, Scotland, Wales, and Northern Ireland. According to HMRC, parents pay money into a childcare account, which the government tops up by 25% — for every £8 paid in, the government adds £2. The reminder was issued on April 5 via X, HMRC confirmed.
Martin Lewis, founder of Money Saving Expert, has highlighted that around 800,000 parents are missing out on the scheme. According to Daily Express - Finance, Lewis described the application process as taking roughly 30 minutes. To be eligible, parents must be working, and if they have a partner, that partner must also work. They must not be receiving support through Universal Credit, as most parents eligible for Universal Credit can save more using its childcare elements. Usually both parents in a couple must have an income of at least £2,643 (2026/27) each every three months, though recently self-employed people have 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 older children already enrolled, but eligibility is limited to the last 31 days of leave for parents claiming for a new child. Parents who are due to start work do not have to wait until they start to apply.
HMRC also warned that Child Benefit claimants earning over £60,000 per year will face the High Income Child Benefit Charge (HICBC). Child Benefit rates are currently £26.05 per week for the first child and £17.25 for additional children, though some sources cite £27.05 and £17.90 respectively, creating uncertainty about the exact amounts. HMRC confirmed early Child Benefit payments in May due to bank holidays: payments due May 4 will be paid on May 1, and those due May 25 will be paid on May 24. Payments are usually made every four weeks on Monday or Tuesday. Parents liable for HICBC can request HMRC to adjust their tax code instead of filing a Self Assessment tax return. Over 1.4 million parents and carers claim Child Benefit, which also provides National Insurance credits protecting State Pension entitlement. Child Benefit payments stop automatically when a child turns 16 unless parents notify HMRC of continued education or training, and can be extended until the child turns 20 if they are in approved full-time 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 12 hours per week of supervised study or work experience.
The exact date when the new Child Benefit rates took effect remains unclear, and there is also uncertainty about the specific income threshold for HICBC to start repaying Child Benefit, with some sources implying £80,000. Additionally, it is not known how many parents are actually missing out on Tax-Free Childcare according to official data, as the 800,000 figure comes from Martin Lewis. Residency requirements for Tax-Free Childcare have not been detailed by HMRC.