Tax-Free Childcare: here's how Northern Ireland working families could be thousands of pounds better off

HM Revenue and Customs (HMRC) is encouraging others to make use of the scheme now to help pay for childcare in the summer holidays.

In the UK, nearly 826,000 working families saved up to £2,000 per child with Tax-Free Childcare in the 2024 to 2025 tax year.

Latest figures from HMRC show in March 2025, 15,660 families in Northern Ireland used the scheme to save on their annual childcare bills, an increase of 2,970 families compared to the previous March.

Working families who sign up to Tax-Free Childcare can boost their annual budget by up to £2,000 per child up to the age of 11 or up to £4,000 up to the age of 16 for a disabled child.

Parents can use the scheme to help towards the cost of approved childcare whether that’s nursery for younger children, or for older children – wraparound or after school care clubs during term time or holiday clubs for the long summer holidays ahead.

Myrtle Lloyd, HMRC’s director general for customer services, 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.”

For every £8 deposited in a Tax-Free Childcare account, the government tops it by £2, which means parents can receive up to £500 (or £1,000 if their child is disabled) every three months towards paying for their childcare costs.

Once families have opened a Tax-Free Childcare account, they can deposit money and use it straight away or keep it in the account to use it whenever it’s needed. Any unused money in the account can be withdrawn at any time.  

Families could be eligible for Tax-Free Childcare if they:  

• Have a child or children aged 11 or under. They stop being eligible on September 1 after their 11th birthday. If their child has a disability, they receive up to £4,000 a year until September 1 after their 16th birthday.
• The parent and their partner (if they have one) earn, or expect to earn, at least the National Minimum Wage or Living Wage for 16 hours a week, on average.
• Each earn no more than £100,000 per annum .
• Do not receive Universal Credit or childcare vouchers .

For more details on eligibility and to register for Tax-Free Childcare, go to GOV.UK. Tax-Free Childcare can be used alongside the free childcare hours subject to eligibility.