What childcare fee do you declare?

chelseablue

Doesn't apply to me yet as our fix doesn't end until 2018 but I was just wondering about childcare costs and what you declare to the mortgage company


I'll use me as an example:


Nursery for my son is £760 a month


I get £243 a month childcare vouchers from my employer (salary sacrifice)


So out of my bank I pay £517


So when a mortgage provider asks how much are your childcare fees would I put £760 or £517?

kingstreet

£760.

I would then add the voucher back in to your net salary so the budget planner was correct.

Same with student loan payments.

ACG

This is not something I have come across too often so I just call the lender for anything like this and ask them how they would want me to declare it.

downhillfast

kingstreet wrote: »

£760.

I would then add the voucher back in to your net salary so the budget planner was correct.

Same with student loan payments.

But declaring the £760 is not a true reflection of what the OP is actually paying as the £243 is taken before tax. ie if the OP didn't claim the vouchers their take home pay would not be £243 more is would be closer to only £200 more...

***

edit - Just realised you said to add the full voucher back to the NET salary which makes the numbers work out but surely this would then contradict any bank statements?

kingstreet

downhillfast wrote: »

But declaring the £760 is not a true reflection of what the OP is actually paying as the £243 is taken before tax. ie if the OP didn't claim the vouchers their take home pay would not be £243 more is would be closer to only £200 more...

Well spotted.

luffa

I declared actual childcare costs less the saving from childcare vouchers - roughly if you're a high tax payer savings are £623 per years and if you're basic rate then it's £933/year. This is what my lender (Halifax) said I should declare. Salary gross included the childcare amount.

That's for one person claiming... these savings amounts change if both of you are claiming, and they change if one or both earn over £50K threshold and you have to pay some of those savings back to the greedy (and overly complicated) HMRC...

kingstreet

A little bit of mortgage broker insight.

If I put £760 and the amount we want to borrow remains affordable, £760 goes down.

If the marginal difference of the "tax relief" would make an unaffordable amount affordable, I might be motivated to work out the difference.

However, it's usually not enough of a difference, so we move to a lender which ignores childcare costs.

Shockingly, if we don't need bonus/overtime/commission for affordability we don't enter that either.

chelseablue

Thank you all


Now Im even more confused :rotfl:


Our fix doesn't end until March 2018 and from next September our son will be eligible for the government funding for 3 and 4 year olds so the childcare fees will be reducing which will help (hopefully reducing a lot!)