Tax credits and Government funding pickle

young_321

Hi

What a pickle I'm in.

From 1 September I became entitled to 15 hours from the Government towards my sons childcare payments.

Currently, I'm set up as:

£36 per day at his nursery
I take £36 and multiply by 21 days (average amount in any month)
This gives me £756
I also receive £243 each month in childcare vouchers, so I subtract this from the £756 which equals £513

I then take the £513 and divide by 52 and then multiply by 12. This means I pay £118 per week and this figure is what HMRC want to know to base my current tax credits on.

Since the hours funding came in through the Government I have no idea how to factor this in....

Nursery provided me with their funding term sheets which states:

03.09.12 - 17.12.2012
14 wks (No. of term time funded weeks)
210 (No. of term time funded hours)

07.01.12 - 28.03.2013
11 wks (No. of term time funded weeks)
165 (No. of termtime funded hours)

How do I even start to factor the above information in my current set up so I can let HMRC know my new weekly amount I pay towards childcare?

Can anyone please please help?

benefitbaby

This is very in-depth but may prove useful www.revenuebenefits.org.uk/tax-credits/guidance/how-do-tax-credits-work/understanding-childcare/calculating-costs/

benefitbaby

Also the Tax Credit booklet called "Working Tax Credit - Help with the cost of childcare" confirms that you have to notify them within one month if:


• you start getting help with your childcare from a local authority or any government department – such as the early years education grant for three- and four-year olds

• you start getting help with your childcare costs through your employer (or anyone
else), such as vouchers or other salary sacrifice schemes.

princessdon

You need to ask them their hourly neg rate - normally £3.44 ph (some areas may be higher I can't comment if you live in central London).

Eg -3.44 * (15*39). = 2012.40 pa. \ 52 weeks is 38.70 pw.


But if you only pay 50 weeks of year or are planning to take little one out early then adjust the weeks.

princessdon

Btw is your little one in 5 days a week? If so then unless you have a large payment holiday period - I get you are entitled to more than you claim.

young_321

Hi - great advice there. My son is in 5 days each week, full time. The nursery have said the hourly rate is £3.70.

BTW princessdon, what is the (15 * 39) bit relate to?

princessdon

15 hrs pw x 39 weeks it is payable.


If he's in FT at 5 days a week you may have underestimated your costs and be entitled to more.

Eg £36 per day. X 5 days a week. Multiply by the number of weeks you pay for (eg I pay for 50 weeks as we have to take 4 weeks holiday but pay for 2 and 2 are free). Then divide by 12.

Then minus your £243 vouchers. I think unless you have a lot of free holidays you will find that you are entitled to a bit more, not a lot but every penny helps when you pay childcare.