More than 500,000 families used Tax-Free Childcare in past year

New data published by HMRC has revealed that 512,415 families made use of the Tax-Free Childcare (TFC) scheme in the past year.

Under Tax-Free Childcare, the tax relief available is 20% of the costs of childcare, up to total childcare costs of £10,000 per child, per year. The scheme is therefore worth a maximum of £2,000 per child (£4,000 for a disabled child). Parents are able to apply for TFC for children under 12 (up to 17 for children with disabilities).

Parents are able to register with the government and open an online account. The government will then ‘top up’ payments into this account at a rate of 20p for every 80p that families pay in.

The figure of 512,415 for the 2021/22 tax year is significantly up from 374,135 recorded in the previous year.

HMRC has warned that thousands of families could be missing out on the benefits that Tax-Free Childcare brings – it has estimated that 1.3 million families could be eligible for the scheme.

Myrtle Lloyd, Director General for Customer Services at HMRC, said: ‘TFC can make a big difference to families, helping with the bills for things like nurseries, childminders and after school clubs.

‘It’s easy to register – search ‘Tax-Free Childcare’ on GOV.UK.’

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