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How to use Tax Free Childcare and Universal Credit

Active Holidays

Navigating the complexities of financial support for families can be a daunting task, especially when juggling work and childcare. The good news is that the UK government offers valuable assistance through schemes like Tax-Free Childcare and Universal Credit, designed to ease the financial burden on working parents. Understanding how to effectively utilise these resources can significantly impact your family’s budget and provide peace of mind.  

In this guide, we’ll break down the essentials of both schemes and explore how to use them. 

What is Tax-Free childcare and how does it work?

Tax-free Childcare is a government initiative designed to help working parents with the cost of childcare.

You open an online account with the government (through the government website) which you can pay into to cover the cost of childcare with a registered provider. For every 80p you pay in, the government will top up an extra 20p.

The government will top up the account with 20% of childcare costs up to a total of £10,000.

How can I apply for Tax-Free childcare funding?

If you’re eligible, the application take around 20 minutes top complete. All you need is your details (and your partner’s, if applicable), including your:

  • National Insurance number
  • Unique Taxpayer Reference (UTR) if you’re self-employed

During this application process, you’ll discover whether you’re eligible for Tax-Free Childcare. If you live in England, you’ll also find out whether you’re eligible for 30 hours free childcare. It’s possible that you’ll find out straight away, but it can take up to a week.

Additionally, you will need to reconfirm your details every three months to ensure continued eligibility for the benefits. If you are found eligible, you will receive a code that you need to provide to your childcare provider along with your National Insurance number and your child’s date of birth. 

For more information and to start saving on all the great activities ActiveMe 360 has to offer, visit: Tax-Free Childcare – GOV.UK (

What about childcare vouchers – Can I still use them?

Childcare vouchers, as well as directly contracted childcare (childcare your employer arranges with a provider, such as salary sacrifice) have been discontinued by the government.

However, if you joined either one of these schemes on or before 4 October 2018, you’ll still be able to receive these vouchers and use them to support your childcare payments.

These two types of childcare funding have since been replaced by the tax-free childcare scheme highlighted above.

IMPORTANT: If you do decide to apply for tax-free childcare, you will no longer receive any of the above-mentioned schemes’ funding and you won’t be able to go back to using them. If you’re unsure on whether or not you should stick to childcare voucher or apply for tax-free childcare funding, here is a useful calculator to help you decide.

For more detailed information and to ensure you’re following the correct process, refer to the government guidance on Universal Credit childcare costs available on GOV.UK. 

What is Universal Credit and how does it work? 

Universal Credit is a monthly (or twice-monthly in Scotland) payment to help with living costs. It combines six benefits into one, making it easier to manage. You may be eligible if you’re on a low income, out of work, or unable to work.  

How to Use Universal Credit for Childcare Costs?

If you pay for childcare while you work, you might be eligible to claim some of those costs back through Universal Credit. This includes expenses for services like Active Holiday clubs, ActivePlus wraparound care, after school clubs, and breakfast clubs.  


You can claim back some of your childcare costs via Universal Credit if you’re paying for childcare to allow you to work. This support extends to various types of childcare, including holiday camps and wraparound care services. 

Please refer further to the government guidance: Universal Credit childcare costs – GOV.UK ( 


How do childcare cost payments work on Universal Credit? 

  1. Register and Book: First, you need to register an account with ActiveMe 360 CIC and make the necessary booking and payment for your childcare services. You can sign in/register your account here:
  2. Report Payment: After you’ve made the payment, you need to report this to Universal Credit through your online account.
  3. Reimbursement: Universal Credit will reimburse a portion of the childcare costs directly to you once the childcare session has taken place.


Evidence required for your claim: 

After booking and paying for childcare with ActiveMe 360, you will receive: 

– A booking confirmation detailing the session dates, times, and amounts. 

– A payment confirmation confirming receipt of your payment. 

 These documents contain the necessary information for your Universal Credit claim. If needed, ActiveMe 360 can also provide this information via email or letter. Contact us at [email protected] if you require alternative documentation. 


How much can you get back? 

You can claim up to 85% of your childcare costs through Universal Credit, with a maximum monthly limit of: 

– £1,014.63 for one child 

– £1,739.37 for two or more children 


For example: 

Active Holidays: If you pay £24.50 for a day at a holiday camp, you can claim up to £20.83 back from Universal Credit, reducing your cost to just £3.67 for the day. 

ActivePlus Wraparound: If you pay £1,100 for a month of wraparound care, you can claim up to £862.44, which is 85% of the maximum monthly limit for one child. 


*It’s important to note that you can’t receive Tax-Free Childcare simultaneously with Working Tax Credit, Child Tax Credit, Universal Credit, or Childcare Vouchers. Deciding which scheme is best for your family depends on your specific circumstances. To make an informed decision, use the government’s childcare calculator* 


 By understanding how to utilise Universal Credit for childcare, you can significantly reduce your childcare expenses, making it easier to balance work and family life. 

Whether you receive childcare vouchers or have access to the tax-free childcare funding, you can start booking on to our camps by visiting: and if you need guidance on how to book onto our camps, click here.