Independent tool · tax year 2026-27
Nursery account, or Universal Credit — not both
You usually cannot have Tax-Free Childcare and Universal Credit at the same time. Opening a Tax-Free Childcare account usually means ending the whole Universal Credit claim, not only the childcare bit — it is not extra on top. This is information only — not a promise either scheme will pay. Check GOV.UK before you cancel anything.
Tax year 2026-27
Tax-Free Childcare or Universal Credit?
Enter your figures below for a rough 2026-27 estimate, or run the full calculator for a result based on your family.
This is information, not advice and not a guarantee you will receive a stated amount. Rules depend on your household, work and immigration status. Check GOV.UK before you apply or change a claim.
How the two schemes differ
Tax-Free Childcare is an HMRC account: the government adds a 20% top-up on what you pay in. The published 2026-27 cap in this site’s tax-year file is £500 a quarter per child (£1000 if the child is disabled). Either parent whose pay before tax is over £100,000 usually knocks the household out.
Universal Credit can repay 85% of eligible registered childcare if you (and a partner, if you have one) meet the work rules and report costs on time. The 2026-27 monthly limits in this site’s rates are £1,071.09 for one child and £1,836.16 for two or more. The box above applies those caps.
If you are already on Universal Credit, applying for Tax-Free Childcare is not a small switch. GOV.UK says you cannot have both, and leaving Universal Credit means leaving the whole award, not only the childcare element. Wait for a Tax-Free Childcare decision before you cancel anything.