Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what recent assessment she has made of the potential impact of the tax-free childcare system on levels of administration for early years providers.

This question was answered on 8th September 2025
HMRC continually assesses the administrative impact of Tax-Free Childcare (TFC) on childcare providers, including those focused on early years provision, via customer feedback and internal system reviews. For many providers, once they have registered for TFC they will receive TFC payments made by parents directly into their bank account, just as they would when receiving non-TFC payments.

In 2024, HMRC improved the administration for childcare providers by streamlining the TFC registration process and introducing a mechanism for TFC payments to be made via external payment providers used by some childcare providers. These changes are designed to improve the registration and payment functions of TFC, making the service more user friendly, efficient and accessible.