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Childcare: Tax Allowances

Asked by James NaishLabourTreasuryTabled Answered 30 April 2025UIN 46916

The question

To ask the Chancellor of the Exchequer, if she will (a) increase the tax-free childcare allowance and (b) allow parents to use that allowance in place of funded hours.

Answered by Darren Jones

The £2,000 Tax-Free Childcare (TFC) top-up, which can be claimed per year and per child up to age 11 (and £4,000 per disabled child, up to age 16), was set at this level because the Government believes it strikes the right balance between helping parents with their childcare costs and managing the public finances in a responsible way.

From September 2025, childcare entitlements for eligible working parents of children aged from nine months will increase from 15 hours to 30 hours, helping hundreds of thousands of families with the cost of childcare and supporting parents to work. This year alone, we expect to provide over £8 billion for the early years entitlements – which is an additional £2 billion (over 30% increase) compared to 2024. Please note that parents can claim both TFC and DfE childcare entitlements so long as they are eligible.

The government keeps all aspects of childcare policy under review.

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