Nursery fees of £1846 per month, will we be better off with childcare vouchers?

laurenjs88

Hi,

I've calculated when I go back to work at the end of November our childcare fees will be £1846 per month! :eek: Thats more than OH & I earn combined!

Im a little confused as to how the childcare tax credits work, suposedly we dont get WTC but we are going to recieve approx £217pw in tax credits for both the girls. Based on DD1's childcare of £190.22 per week. Im pretty sure that amount includes Childcare so we must be getting WTC!?! Entitled to says yes to WTC the HMRC lady said no?

Anyway, if you can only claim 80% of a maximum £300 per week thats £240pw when our actual fees are going to be approx £425pw so were paying approx £185pw out of my wages, In that case I am effectively working 40 hours for £70.95 a week in a job that is 15miles away! (so god forbid the kids or i ever get sick!) Anyway i digress!

According to Martins "rule of thumb" if you are a family with two children with an income of under £30,000 were better off with tax credits! (we will earn less this financial year as im on MA)

My employer offers childcare vouchers so i wonder whether it would be worth me getting the maximum amount of childcare vouchers i can when i return to work in november.

If i reduce the childcare fee's by £50 a week with vouchers we are still well over the £300 max limit so it doesnt effect the amount of childcare help we recieve but by reducing my earnings by £200ish a month on what will only be £4k max earnt this financial year it doesnt make them go up either, (CTC) but does increase the amount of LHA & CTB were entitled to by about £10 a week.

So it does seem marginally better to get the vouchers as it ups the LHA & CTC so im effectively sacrificing £160 & getting £200 of vouchers

Does that seem right to you?

moomoomama27

firstly if your partners combined income is more than the late 16K (not 100% sure of the figures), you won't qualify for the working tax credit element, on the CTC element and childcare.

Go here www.entitledto.com and input your figures, include all childcare costs and it should give you a weekly figure.

nannytone_2

my daughter pays £400 a month on top of her nusery vouchers. she gets £300 a YEAR help. wheres the incentive? To her its setting her boys a good example by seeing that they need to work. you cant blame people for not bothering..........

moomoomama27

Nannytone I agree, t seems that the only incentives that get offered finacially are for people who don't work!

It would be nice if the hard working tax payers of this country were rewarded more!

laurenjs88

nannytone wrote: »

my daughter pays £400 a month on top of her nusery vouchers. she gets £300 a YEAR help. wheres the incentive? To her its setting her boys a good example by seeing that they need to work. you cant blame people for not bothering..........

Its shocking isnt it, I dread to think what it will be like when i go back to full time wages! I doubt we will get anything at all towards it but the fees wont go down dramatically untill the girls are at School!

We'd have less money on benefits but there would be alot less stress about money!

laurenjs88

moomoomama27 wrote: »

firstly if your partners combined income is more than the late 16K (not 100% sure of the figures), you won't qualify for the working tax credit element, on the CTC element and childcare.

Go here www.entitledto.com and input your figures, include all childcare costs and it should give you a weekly figure.

I've already worked out how much (ish) we will get come November, now just trying to work out whether its better to get some childcare vouchers. It doesnt really make any difference whatever i do.

dundeediva

This might sound a bit harsh but why should other tax payers pay for people to send children to ridiculously high childcare costs? Personally I would be looking around for a cheaper childcare provider!

Don't get me wrong I totally agree that the help isn't sufficient for people who work full time and need childcare but shouldn't you maybe be looking for a more affordable provider?

mitchaa

laurenjs88 wrote: »

Hi,

I've calculated when I go back to work at the end of November our childcare fees will be £1846 per month! :eek: Thats more than OH & I earn combined!

Im a little confused as to how the childcare tax credits work, suposedly we dont get WTC but we are going to recieve approx £217pw in tax credits for both the girls. Based on DD1's childcare of £190.22 per week. Im pretty sure that amount includes Childcare so we must be getting WTC!?! Entitled to says yes to WTC the HMRC lady said no?

Anyway, if you can only claim 80% of a maximum £300 per week thats £240pw when our actual fees are going to be approx £425pw so were paying approx £185pw out of my wages, In that case I am effectively working 40 hours for £70.95 a week in a job that is 15miles away! (so god forbid the kids or i ever get sick!) Anyway i digress!

According to Martins "rule of thumb" if you are a family with two children with an income of under £30,000 were better off with tax credits! (we will earn less this financial year as im on MA)

My employer offers childcare vouchers so i wonder whether it would be worth me getting the maximum amount of childcare vouchers i can when i return to work in november.

If i reduce the childcare fee's by £50 a week with vouchers we are still well over the £300 max limit so it doesnt effect the amount of childcare help we recieve but by reducing my earnings by £200ish a month on what will only be £4k max earnt this financial year it doesnt make them go up either, (CTC) but does increase the amount of LHA & CTB were entitled to by about £10 a week.

So it does seem marginally better to get the vouchers as it ups the LHA & CTC so im effectively sacrificing £160 & getting £200 of vouchers

Does that seem right to you?

How have you come up with the £1846 figure?

£425 x 52/12? Are they payable for 52 wks?

I know mine are payable over 50wks as the nursery are closed over the xmas/new year period?

Why is 1 daughter £190 pw and the other £235? Don't you get some form of discount for having 2 of them in at the same nursery and dont you get a day and a half free at the age of 3?

Anyway, the childcare voucher scheme works by sacrificing £243 from your gross salary. You will see a £167 reduction from your pay packet which in effect means you save £76. (You get £243 worth of vouchers but only having paid £167 for them)

If your husband gets the choice for a salary sacrifice too, then that is obviously a saving of £152pm.

I would have thought that if your childcare was so expensive eclipsing your own salary then its probably not in your best interest going back to work until they are at school?

snugglepet20

The most money you can get from the childcare element of tax credit is £240 per week for 2 or more children. Do you have £1000 a month spare to spend on nursery when you state that £1846 is more than you and OH earn combined?

Realistically you cannot afford to go back to work, I am in the same situation it sucks but I am stuck at home until the children are at school.

flea72

Tbh if you your family income is less than you will be paying out in childcare, then there is little point in you returning to work

joint annual income less threshold of £6420 = excess income

£545+£545+£2300+£2300+£1920+£1890+£790+80%childcare(£12480) = max tax credit (which i work out to be £22770)

max tax credit (£22770)less 39% of excess income = award entitlement

even basing my figures on the £1846/m you say you and your OH dont earn, you should be getting £271/wk CTC, if your income is even less, then you will get even more

hth F

iamana1ias

I didn't think you could mix vouchers with tax credits.