Tax-Free Childcare: a plain-English guide
Tax-Free Childcare is a government top-up on what you pay for registered childcare. Lots of working parents could use it and don't, and others lose it without noticing because of the £100,000 rule or a missed reconfirmation. This page explains how it works, who can get it and what it's worth. It is general guidance only, not tax or financial advice, and it uses the rules on GOV.UK for the 2026-27 tax year.
The short version
- For every £8 you pay into your childcare account, the government adds £2. That's a 20% top-up on the bill.
- The top-up is up to £500 per child every 3 months (up to £2,000 a year), or £1,000 every 3 months (up to £4,000 a year) for a disabled child.
- Your child is covered until the September after they turn 11 (16 if disabled).
- You and your partner must each expect to earn at least £2,643.68 over the next 3 months (if 21 or over), and neither of you can expect adjusted net income over £100,000.
- You must reconfirm every 3 months, and you can't get it at the same time as Universal Credit childcare or childcare vouchers.
What Tax-Free Childcare is
You open an online childcare account with HMRC. You pay money in by Direct Debit, standing order or bank transfer, the government adds its 20% at the same time (usually within one working day), and you pay your childcare provider from the account.
GOV.UK's example: your childcare bill is £250. You pay in £200 (80%), the government adds £50 (20%), and the £250 goes to your provider.
You can use it for childminders, nurseries and nannies, and for breakfast, after-school and holiday clubs. It can also cover extras such as nappies, meals and trips when your provider supplies them. The provider must be approved (registered) and signed up to Tax-Free Childcare, so check with them before you apply.
How much you can get
| Every 3 months | A year | Bill that uses the full top-up | |
|---|---|---|---|
| Each child | up to £500 | up to £2,000 | £2,500 per 3 months |
| Each disabled child | up to £1,000 | up to £4,000 | £5,000 per 3 months |
The limit is per child, so two children can get up to £4,000 a year between them. Anything you spend above the bill that uses the full top-up you pay in full. The 3-month periods run from when your account started, not from the tax year.
A child counts as disabled for the higher limit if they're certified as blind or severely sight impaired, or get Disability Living Allowance, Personal Independence Payment, Armed Forces Independence Payment, or (in Scotland) Child Disability Payment or Adult Disability Payment. The extra can pay for more hours, or help your provider get specialist equipment for your child.
Age limits
Your child is eligible until the September after they turn 11. For a disabled child it's the September after they turn 16. So a child who turns 11 in March can still be covered until that September, which helps with the summer holiday club before secondary school.
Who can get it
Working. You (and your partner, if you live with one) usually need to be in work, employed or self-employed, or starting or returning to work. Sick leave, annual leave, maternity, paternity, shared parental and adoption leave, statutory neonatal care pay and bereaved partner's paternity leave all count.
Minimum earnings. You and your partner must each expect to earn at least this much over the next 3 months, before tax:
| Your age | Over the next 3 months | Weekly equivalent |
|---|---|---|
| 21 or over | £2,643.68 | £203.36 |
| 18 to 20 | £2,256.80 | £173.60 |
| Under 18 or an apprentice | £1,664 | £128 |
That's 16 hours a week at the April 2026 minimum wage (£12.71, £10.85 or £8 an hour). Earnings from jobs and self-employment count, and you can add more than one job together. Dividends, interest, property income and pension income don't count. If you're paid irregularly, or you're self-employed and the next 3 months will be quiet, you can use an average of what you expect over the tax year: £10,574.72 a year is the same as £2,643.68 every 3 months.
Newly self-employed. If you started your business less than 12 months ago, it doesn't matter how little you earn.
A partner who isn't working can still qualify if the other parent works and they're eligible for Incapacity Benefit, Severe Disablement Allowance, Carer's Allowance (or Carer Support Payment in Scotland), contribution-based Employment and Support Allowance or National Insurance credits.
The £100,000 limit. You can't claim if you or your partner expect adjusted net income (including any foreign income) over £100,000 for the current tax year. There's no taper: £1 over loses the top-up for every child. See the £100,000 tax trap guide for how adjusted net income works and how pension payments bring it down.
You also can't claim if your child doesn't usually live with you, you foster the child, or you or your partner get a childcare bursary or grant. You need a National Insurance number (your partner too) and British or Irish citizenship, settled or pre-settled status, or permission to access public funds.
Reconfirming every 3 months
You must sign in to your childcare account every 3 months to confirm your details are up to date. If you don't, your Tax-Free Childcare stops. Each time, you're confirming you still expect to meet the earnings test for the next 3 months and to stay under £100,000 for the year, so a pay rise, a bonus or a new side business can change the answer.
When you first apply you usually hear straight away, or within 10 days if HMRC needs to make extra checks. If you're starting or returning to work, the date you start decides when you can apply: work starting between 1 May and 30 September, apply from 1 April; between 1 October and 31 January, from 1 September; between 1 February and 30 April, from 1 January.
Free childcare hours in England
Tax-Free Childcare is UK-wide. Free childcare hours are run separately in each nation, and in England there are two main schemes:
- 15 hours for all 3 and 4-year-olds: 570 free hours a year, usually 15 hours a week for 38 weeks, from the term after your child's 3rd birthday (1 January, 1 April or 1 September) until they start reception. No earnings test.
- Free Childcare for Working Parents: 30 hours a week for 38 weeks for children from 9 months to 4 years, using the same earnings and £100,000 tests as Tax-Free Childcare. You can apply from when your child is 23 weeks old and you reconfirm every 3 months too.
Some 2-year-olds can also get 15 hours if the family gets extra support. The key point: you can get free hours and Tax-Free Childcare together. HMRC checks you for both when you apply, and you can use your childcare account to pay for extra hours and for extras like meals, nappies and trips your provider charges for. Scotland, Wales and Northern Ireland have their own free childcare schemes.
Tax-Free Childcare vs Universal Credit or childcare vouchers
You can't get Tax-Free Childcare at the same time as Universal Credit or childcare vouchers, so you have to pick one.
- Universal Credit childcare can pay back up to 85% of childcare costs, up to £1,071.09 a month for one child or £1,836.16 for two or more. If you're on Universal Credit with lower earnings, that's often worth more than a 20% top-up. If you're moving to Tax-Free Childcare, wait until you get a decision before cancelling your Universal Credit claim.
- Childcare vouchers are closed to new joiners. If you joined your employer's scheme on or before 4 October 2018 you might still take up to £55 a week of wages free of tax and National Insurance. If you get Tax-Free Childcare you must tell your employer within 90 days, they stop new vouchers, and you can't rejoin. You can still spend vouchers you already have.
Which is better depends on your bills, income and household. GOV.UK's childcare calculator compares the options, and the Tidy Sheets Tax-Free Childcare calculator shows the top-up for each child with the cap.
Worked examples
1. One child at nursery, £1,200 a month. Every 3 months the bill is £3,600. 20% would be £720, but the cap is £500, so the government adds £500 and you pay in £3,100. Over a year: bills £14,400, top-up £2,000, you pay £12,400.
2. School-age child, £400 a month on breakfast, after-school and holiday clubs. Every 3 months the bill is £1,200, under the cap. You pay in £960 and the government adds £240. Over a year that's £960 of top-up.
3. Disabled child, £1,500 a month. Every 3 months the bill is £4,500. 20% is £900, under the £1,000 cap, so the government adds £900 and you pay in £3,600. Over a year the top-up is £3,600.
4. Two children, and the £100,000 cliff. Two children at £1,000 a month each: each child's bill is £3,000 every 3 months, so each gets the full £500: £4,000 a year between them. If one parent expects adjusted net income of £101,000, the family loses all of it. Paying £800 into a relief-at-source personal pension (the provider adds £200, so £1,000 goes in) brings adjusted net income back to £100,000 and keeps the £4,000.
5. Free hours plus Tax-Free Childcare in England. Working parents get 30 free hours a week for their 3-year-old, and the nursery still charges £400 a month for extra hours and meals. Paid through the childcare account, they pay in £320 and the government adds £80 each month, £240 every 3 months, well under the cap.
Examples assume the same bill every month and that the family meets the other rules. Try your own figures in the Tax-Free Childcare calculator.
FAQ
Can I get Tax-Free Childcare and the 30 hours at the same time?
Yes. In England you can get Free Childcare for Working Parents and Tax-Free Childcare together, and use Tax-Free Childcare for hours or extras the free hours don't cover.
Is there a taper if I earn just over £100,000?
No. Over £100,000 adjusted net income (you or your partner) means no Tax-Free Childcare for any child. Pension contributions and Gift Aid lower adjusted net income: the pension and adjusted net income calculator shows how much you'd need to pay in.
What happens if I forget to reconfirm?
Your Tax-Free Childcare stops. Sign in every 3 months; your account shows when the next check is due.
Can I get it if I'm self-employed?
Yes. If your business started less than 12 months ago the earnings test doesn't apply. Otherwise you can use your expected average over the tax year if the next 3 months will be low. You'll need your Unique Taxpayer Reference to apply.
Can both parents open an account for the same child?
No. If you're separated and jointly responsible, decide who applies; if you can't agree, you both apply and HMRC decides who gets the account.
Can I keep my childcare vouchers?
No. Tell your employer within 90 days of getting Tax-Free Childcare; new vouchers stop and you can't rejoin. Vouchers you already have can still be used.
Does my partner's income matter?
Yes. If you live with a partner, they must also meet the earnings test (unless they qualify through one of the benefits above), and their adjusted net income must not be over £100,000 either.
Track every bill in one sheet
The Tidy Sheets UK Childcare Costs & Tax-Free Childcare Tracker 2026-27 logs every nursery, childminder and club bill for up to 6 children, works out the top-up bill by bill with the 3-month cap and age limit, checks both parents against the earnings and £100,000 rules, and shows England's 15 and 30 free hours dates for each child. Excel and Google Sheets. Find it in the shop.
Visit the shopRelated: Tax-Free Childcare calculator · £100,000 tax trap guide · Child Benefit tax charge calculator · High Income Child Benefit Charge guide.
Official sources
Tax-Free Childcare (GOV.UK)
Tax-Free Childcare: check if you're eligible (GOV.UK)
Free Childcare for Working Parents (GOV.UK)
15 hours free childcare for 3 and 4-year-olds (GOV.UK)
Universal Credit and childcare costs (GOV.UK)
Childcare vouchers (GOV.UK)
National Minimum Wage rates (GOV.UK)
Adjusted net income (GOV.UK)
Checked 17 October 2026. HMRC decides eligibility when you apply.