Most efficient/correct way to use Tax free childcare?

gubar

Hi,

we're just signed up for this for our baby who has just started nursery. Out total monthly cost is £548.25 per month.

I know we can put in 80% of that each month, and get 20% back (we could put in £438.60, and receive a top up of £109.65), with total yearly contribution of the government of £1,315.80 per year.

Is it possible to put in more than that, to maximise the amount the government pays in per year? So for example, if I put in £8k over the course of 1 year to get £2k back - would this carry over into the next year, or does it not work like that, i.e are you limited by you actual childcare costs over 12 months?

We've just made an initial payment of £800 to start building a balance, but I'm not sure if this is the right approach and if I should just put in exactly what is required for the years' total spend.

I have done some research but this is still not clear to me. I know on the older voucher scheme you could build up a balance to maxamise how much you could benefit.

Any help offered greatly appreciated!

Thanks,

Steven

gubar

Giving myself a bump. Anyone have any thoughts on this? Thank you.

xylophone

https://www.moneysavingexpert.com/family/tax-free-childcare/

might help.

Merchandiser2367

gubar wrote: »

Hi,

we're just signed up for this for our baby who has just started nursery. Out total monthly cost is £548.25 per month.

I know we can put in 80% of that each month, and get 20% back (we could put in £438.60, and receive a top up of £109.65), with total yearly contribution of the government of £1,315.80 per year.

Is it possible to put in more than that, to maximise the amount the government pays in per year? So for example, if I put in £8k over the course of 1 year to get £2k back - would this carry over into the next year, or does it not work like that, i.e are you limited by you actual childcare costs over 12 months?

We've just made an initial payment of £800 to start building a balance, but I'm not sure if this is the right approach and if I should just put in exactly what is required for the years' total spend.

I have done some research but this is still not clear to me. I know on the older voucher scheme you could build up a balance to maxamise how much you could benefit.

Any help offered greatly appreciated!

Thanks,

Steven

We have a similar question to this as we do not use maximum child care allowance for year......the answer would be quite beneficial to a lot of people out there who do not take maximum tax free allowance each year.

Unfortunately cannot find an answer in the article suggested above.

Also, if you pay in £2000 and then take it out for what ever reason, would the governments portion stay in the account? (We have a little spare pot in our account but may need to take some out for an unexpected cost but don't want to if the extra 20% also comes out - hadn't planned it this way, just something has popped up)

Any ideas out there anyone who has done this already or more experience?

pmlindyloo

I suggest you ask these questions via the helpline:

https://www.gov.uk/government/organisations/hm-revenue-customs/contact/childcare-service-helpline

superbigal36

As on the other thread. You can only ever make a full withdrawal. You do not define that withdrawal. The system simply refunds your contribution and refunds the govt leaving you a Zero balance.


No free money left behind unfortunately.

sheramber

https://www.turn2us.org.uk/Benefit-guides/Tax-Free-Childcare/How-will-Tax-Free-Childcare-work

If your circumstances change or you no longer want to pay into the account, then you’ll be able to withdraw the money you have built up. For any amount you withdraw, the government will withdraw the contribution it has made based on that amount.

gubar

Thank you everyone for all the replies on here. I had been away from the thread for ages and came back to all these, thanks.

Even after reading the replies, I'm still not sure about the answer - seems many people are a bit unclear about this, same as me. So I'll try the help line as suggested

If I get a clear answer that may help other, I'll reply back here with it.

Thanks again,

g