As the summer holidays approach, HM Revenue and Customs (HMRC) is encouraging Northern Ireland families to sign up for Tax-Free Childcare, a scheme that allows working parents to save up to £2,000 per child annually on childcare costs.

This initiative is part of the government's broader 'Plan for Change' aimed at putting more money back into people's pockets.

In the 2024 to 2025 tax year, nearly 826,000 working families across the UK benefited from Tax-Free Childcare. Latest figures from HMRC show a significant increase in uptake, with 579,560 families using the scheme in March 2025, an rise of 81,770 families compared to the previous year.

The scheme provides a government top-up of £2 for every £8 deposited into a Tax-Free Childcare account, meaning parents can receive up to £500 every three months per child. For disabled children, this increases to £1,000 every three months, with an annual saving potential of up to £4,000 per child up to the age of 16. Myrtle Lloyd, HMRC’s Director General for Customer Services, highlighted the timely benefit of the scheme. She said: "Summer can be an expensive time if you have children. Whatever you’re planning, Tax-Free Childcare can give your plans a welcome financial boost. Go to GOV.UK to start saving today."

The funds can be used for a variety of approved childcare, including nurseries, after-school clubs during term time, and holiday clubs for the upcoming long summer break. Once an account is opened, money can be used immediately or saved for future childcare needs, with the option to withdraw any unused funds at any time.

Families in Northern Ireland could be eligible for Tax-Free Childcare if they meet the following criteria:

• They have a child or children aged 11 or under (eligibility stops on 1 September after their 11th birthday). For children with a disability, the scheme applies until 1 September after their 16th birthday.

• The parent and their partner (if applicable) earn, or expect to earn, at least the National Minimum Wage or Living Wage for 16 hours a week, on average.

• Each parent earns no more than £100,000 per annum.

• They do not receive Universal Credit or childcare vouchers.

Tax-Free Childcare can also be used in conjunction with free childcare hours, subject to eligibility for both schemes. Families are encouraged to visit GOV.UK to check their eligibility and register for the scheme.