Tax-Free Childcare Guide UK (Eligibility, How to Apply 2026)

What Is Tax-Free Childcare

Tax-Free Childcare is a government top-up scheme for working parents in the UK. You open an online account via gov.uk and pay money in — for every £8 you deposit, the government adds £2 (a 20% top-up). You can receive up to £500 every 3 months per child (£2,000 per year), or up to £1,000 every 3 months for disabled children (£4,000 per year). The money can be used to pay registered childcare providers, including nurseries, childminders, after-school clubs, holiday clubs, and home care workers registered with Ofsted or a registered body in Scotland, Wales, or Northern Ireland. The scheme is administered by HM Revenue & Customs (HMRC). There is no limit on how many children you can claim for, as long as they are under the relevant age limit. The account is managed online — you can deposit money, pay your provider, and track your government top-ups through the secure childcare account portal.

How Much You Get and How It Works

The government top-up is 20% of what you pay in, up to the maximum limit. If you pay in £800, the government adds £200 — giving you £1,000 in your account. The maximum government contribution is £500 every 3 months per child (so you need to deposit £2,000 per quarter to get the full £500 top-up). Over a full year, the maximum support is £2,000 per child (£4,000 for disabled children). Unused government top-ups roll over up to the quarterly limits but never exceed the annual maximum. The money in your account can only be used to pay registered childcare providers — you cannot withdraw it for other purposes. Any money you pay in that is not used remains yours and can be withdrawn. The account is linked to your childcare provider — you authorise payments directly through the portal. If you do not use the account for 12 months, HMRC may close it. The tax year runs from 6 April to 5 April, but the scheme operates on quarterly reassessment periods.

Who Is Eligible

You are eligible for Tax-Free Childcare if you (and your partner if applicable) meet all of the following conditions:

• Working — each parent must be in paid work (employed or self-employed) earning at least the National Minimum Wage for 16 hours per week on average (around £167 per week for over-25s in 2026)
• Earnings limit — neither parent can have an individual adjusted net income over £100,000 per year
• Child age — your child must be under 11 (under 17 if disabled). They stop being eligible on 1 September after their 11th birthday (unless disabled)
• UK resident — you must live in the UK and have a National Insurance number

How to Open and Use a Tax-Free Childcare Account

Opening an account is done entirely online at gov.uk/tax-free-childcare. You will need: your Government Gateway login (or you can create one during the process); your National Insurance number; your Unique Taxpayer Reference (UTR) if self-employed; your child's details (name, date of birth, and Child Reference Number from their Child Benefit letter); and your childcare provider's registration details. The application takes about 20 minutes. Once your account is open, you can deposit money at any time — the government top-up is usually added within 24-48 hours. You then authorise payments to your childcare provider directly through the portal. Providers must be signed up to receive Tax-Free Childcare payments — most registered providers in the UK accept it. You can check if your provider is registered when you apply. Reconfirm your eligibility every 3 months by logging into your account and confirming your circumstances have not changed. If you do not reconfirm, the government top-up stops until you do.

Tax-Free Childcare vs Childcare Vouchers vs Universal Credit

Childcare vouchers were the predecessor scheme — they are closed to new applicants since October 2018. If you were already receiving vouchers, you can continue if you stay with the same employer. Vouchers save Income Tax and National Insurance on the amount you sacrifice (up to £55 per week for basic-rate taxpayers, or £28 for higher-rate). Tax-Free Childcare is generally more valuable for basic-rate taxpayers — £2,000 per year vs approximately £1,892 per year in voucher savings. Universal Credit also provides childcare support: up to 85% of registered childcare costs (up to £1,014/month for one child or £1,733/month for two or more children). You can receive Tax-Free Childcare and Universal Credit childcare simultaneously, but you cannot claim for the same childcare costs twice. Working Tax Credit claimants can receive up to 70% of childcare costs (closed to new claims since UC rollout). Use a benefits calculator to see which combination works best for your family. See also Child Benefit Guide.

Using Tax-Free Childcare with Other Schemes

You can use Tax-Free Childcare alongside: the 30 hours free childcare for 3- and 4-year-olds (England) — your Tax-Free Childcare account can pay for additional hours or wraparound care; Universal Credit childcare — but the same cost cannot be covered by both schemes; Child Benefit — these are separate and both can be claimed in full; Employer-supported childcare vouchers — not possible if you opened a Tax-Free Childcare account (they are mutually exclusive); and Disabled child care — if your child is disabled, you can get up to £4,000 per year through Tax-Free Childcare and may also qualify for Disability Living Allowance (DLA). If you already have childcare vouchers through your employer, you cannot open a Tax-Free Childcare account unless you stop receiving vouchers. Compare the two carefully — vouchers may be more valuable for higher-rate taxpayers, while Tax-Free Childcare is generally better for basic-rate and non-taxpayers. See our Universal Credit Guide for more on combining childcare support.

What Happens When Your Circumstances Change

You must reconfirm your eligibility every 3 months. If your circumstances change, you must update your account immediately. Key changes include: starting or stopping work; your child turning 11 (or leaving full-time education); your income exceeding £100,000; separation or divorce; or your childcare provider changing. If you stop working, your Tax-Free Childcare top-ups stop, but any money already in your account can still be used to pay your provider. If you are on parental leave, you are treated as working for up to 12 months. If your partner dies, you may still be eligible as a single parent. Changes to your Universal Credit claim can also affect your overall childcare support package — always check what combination of support gives you the most help. HMRC may audit accounts and reclaim overpayments if you received top-ups while ineligible. Keep records of your eligibility for at least 6 years.

FAQs

Can I use Tax-Free Childcare and Universal Credit together?

Yes, but not for the same childcare costs. You can split your childcare costs between the two schemes. Many families use Tax-Free Childcare for some costs and Universal Credit for others.

What happens if I earn over £100,000?

If you or your partner has an adjusted net income over £100,000, you are not eligible for Tax-Free Childcare. This includes bonuses, dividends, and investment income. If your income drops below £100,000 in a future tax year, you can reapply.

Is Tax-Free Childcare better than childcare vouchers?

For most basic-rate taxpayers, Tax-Free Childcare offers more (£2,000 vs ~£1,892 per year). Higher-rate taxpayers may be better off with existing vouchers. New applicants can only use Tax-Free Childcare as vouchers are closed to new entrants.

Can I use Tax-Free Childcare for a childminder?

Yes, as long as the childminder is registered with Ofsted (England), Care Inspectorate (Scotland), or CIW (Wales). The provider must be signed up to receive Tax-Free Childcare payments through the government portal.

How long does it take for the government top-up to arrive?

Government top-ups are usually added to your account within 24-48 hours of you depositing money. Sometimes it can take up to 5 working days during busy periods. You can schedule payments in advance.