wages same as benefits - what would you do?

SkyeKnight

JimmyTheWig wrote: »

I can't argue with your logic, SkyeKnight!

I suggest, then, if people are in the position of having the option that they investigate with their own circumstances...

But it's wrong!! Even on here in the article on childcare it says you should take Tax Credits instead of Childcare Vouchers if you earn under the threshold for Child Tax Credits (and everywhere else I could find, including the government website). Lovely as it is to have people agree with me - I was hoping someone could show me where I went wrong.

princessdon

SkyeKnight wrote: »

But it's wrong!! Even on here in the article on childcare it says you should take Tax Credits instead of Childcare Vouchers if you earn under the threshold for Child Tax Credits (and everywhere else I could find, including the government website). Lovely as it is to have people agree with me - I was hoping someone could show me where I went wrong.

Because the voucher value is deducted from childcare payable, you can't claim both.

Earnings £20,000 childcare £5000, vouchers £3000

Your "taxable" income is £17,000 but you can only claim the 70% (max) childcare on £2000.

70 % childcare is better than the taxable benefit you get via vouchers.

SkyeKnight

princessdon wrote: »

Because the voucher value is deducted from childcare payable, you can't claim both.

Earnings £20,000 childcare £5000, vouchers £3000

Your "taxable" income is £17,000 but you can only claim the 70% (max) childcare on £2000.

70 % childcare is better than the taxable benefit you get via vouchers.

Not sure I get this: so you earn £20k with £5k childcare costs. Right?

Then you are paying £3k in childcare vouchers and claiming for £2k on Childcare Working Tax Credits?

So, on the £3k you save £360 NI, £600 tax, plus you reduce your taxable income by £3k so get an extra £1230 in Child Tax Credits. A saving of 73%.

On the £2k you get £1400 in extra Childcare Working Tax Credits. A saving of 70%.

???? So, aren't vouchers better?

princessdon

SkyeKnight wrote: »

Not sure I get this: so you earn £20k with £5k childcare costs. Right?

Then you are paying £3k in childcare vouchers and claiming for £2k on Childcare Working Tax Credits?

So, on the £3k you save £360 NI, £600 tax, plus you reduce your taxable income by £3k so get an extra £1230 in Child Tax Credits. A saving of 73%.

On the £2k you get £1400 in extra Childcare Working Tax Credits. A saving of 70%.

???? So, aren't vouchers better?

What circumstances would create £1230 extra for a 3k drop in income?

SkyeKnight

princessdon wrote: »

What circumstances would create £1230 extra for a 3k drop in income?

Because Child Tax Credits get tapered away at 41p for every £1 increase in income.

patchwork_cat

Has she thought about a mother's help. Advertise in the local paper for someone to come from 7.30 until school and then come round to the house at 2 pm do a spot of cleaning put a casserole in the oven and pick the children up. Alternatively if she had the room maybe an aupair?