Tax credit / Childcare voucher query

Maybe_Tomorrow

Hi,

I was wondering if anyone might be able to help me with this.

My daughter has been in childcare since she was 7 months old, and I have always received the childcare element of tax credits. Currently she goes to nursery full time, and her monthly costs are around £650 (£150pw) after her 15 hours free entitlement has been deducted.

I am always looking to make the most of my money, and in the past I have used childcare vouchers from my employer as well as claiming tax credits. Unfortunately (and I know Martin Lewis has written about this somewhere in his guidance), I found that by actually using childcare vouchers, my tax credits were decreased to such an extent that I would have been better off by just taking tax credits alone.

So I cancelled the childcare vouchers a couple of years ago, and I suspect that were I to start using them in my current situation, it would still be the case that they would negatively impact on my money. (Although I can’t be sure!!)

However, next September, my daughter will be starting at primary school. I will still have some childcare costs (before and after school club, and full time care in holiday club over the summer) but (thankfully!!) they will be a lot lower than they are now. As an estimate I’d say £240 a month (£55.38pw), and £124.62pw during the summer holidays. I will be earning £2485 per month gross.

I will still claim tax credits, but I was wondering if there was any way I can definitively find out whether childcare vouchers on top will have a negative effect? I have used the ‘entitled to’ calculator before, but it seems to me that it’s all very “you may be entitled to this, but we can not be sure”. Having spent the last 4 years being incredibly frustrated by the tax credit system I sometimes think no one knows what the magical HMRC computer is going to award you until you actually put the numbers in! It can make forward planning quite stressful.

Anyway, I’m sorry for my slightly rambling message, I hope it makes sense. I am not sure if the above figures will be any help but any advice you may be able to give me would be very gratefully received.

MT

shedboy94

Based upon your income / CCC, in the tax year 12-13 your entitlement would be £3.36pw........based upon a few assumptions - income same this year/single parent/1 child........because of this you would be better off claiming CC vouchers

Maybe_Tomorrow

Thanks for taking a look. Yes, your assumptions are correct. Wow - I would never have thought that my tax credits would drop to this extent!

shedboy94

Maybe_Tomorrow wrote: »

Thanks for taking a look. Yes, your assumptions are correct. Wow - I would never have thought that my tax credits would drop to this extent!

Yeah, unfortunately the tapering rates are dropping quite a bit from April......had the changes not come in the entitlement would have been £15.82pw