Tax-Free Childcare: how the government top-up works
How Tax-Free Childcare works, what the government top-up covers and how to compare it with Universal Credit or other childcare help.
Last reviewed: 6 July 2026 · UK guidance
In brief
Tax-Free Childcare uses an online account into which the parent pays money and the government adds a top-up, subject to current eligibility and limits. It is not a refund of every childcare bill and it cannot usually be used at the same time as Universal Credit childcare support.
The childcare provider must be approved for the scheme. Reconfirm eligibility when prompted and plan for the time needed to move money through the account before the provider’s deadline.
Compare schemes before switching
Check Tax-Free Childcare against Universal Credit childcare, free-hours schemes, employer support and any student or local help. A household can lose one form of support when starting another, so use official guidance or an adviser before closing an existing claim.
Understand the payment flow
The parent pays into the childcare account, waits for the top-up and then pays the registered provider. Keep provider references and allow for weekends or processing time. Ask the nursery or club how it identifies account payments.
Reconfirmation and changing work
The account normally requires periodic reconfirmation. Report work, income, relationship and childcare changes through the official route. If work stops or earnings vary, check the grace periods and alternatives rather than continuing to rely on an outdated eligibility decision.
What costs can be paid
Use the account only for approved childcare with a registered provider. Ask the provider whether deposits, meals, activities or late fees are included in its childcare charge; not every extra is necessarily eligible.
A provider and scheme check
Use this before paying a deposit or large invoice.
I plan to use Tax-Free Childcare for [child]. Please confirm that your setting is registered, the reference I should use, which parts of the invoice can be paid through the account and the payment deadline. I am also checking whether this is better for us than Universal Credit childcare support.
A practical checklist
- Compare with other childcare support first.
- Confirm the provider is registered.
- Allow time for the top-up and transfer.
- Reconfirm eligibility when prompted.
Check the current information
These are the most relevant official or specialist places to confirm live rules, availability and application details.
gov.uk
Open official informationchildcarechoices.gov.uk
Open official informationgov.uk
Open official informationgov.uk
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