Topping up an unused Tax Free childcare account for a year

loki20

Hello,

My partner and I have a 2 year old and have been using his tax free childcare account to pay for nursery (roughly £1200 per month). We're expecting our second child in July, and are reducing our childcare hours dramatically whilst my partner's on maternity leave (about 11 months). 

We were thinking that it'd be worth topping up his tax free childcare account during this time so as to get the full benefit of the 25% top up, and then to use that buffer when he goes back in May next year. Are there any issues with doing that? Does the top up money have a time limit, or a maximum amount? I can't see anywhere that describes that, but thought I should check.

Also, with this in mind we were wondering whether it might be possible to do a similar thing for our second child. Namely, set up the tax free childcare account for her when she's born, and top up over the 10 months in preparation for when she goes to nursery (also in May). Although I'm not sure that this is possible as it seems to say that you can set up your tax free childcare account when on maternity leave only if you're going back to work within a month?

Any advice would be greatly appreciated as it seems like the financially prudent thing to do, but also feels like there could be some gotcha's that I'm missing.

sheramber

https://www.employersforchildcare.org/parents/tax-free-childcare-faqs/#:~:text=Can I pay into a,maternity leave for the newborn.

Can I pay into a Tax-Free Childcare account while on maternity leave?

You cannot open a Tax-Free Childcare account for your newborn child until 31 days before you return to work. However you can have Tax-Free Childcare accounts for any older children while on maternity leave for the newborn. You will be able to retain and pay into those accounts during your maternity leave period.

Typically you cannot use Tax-Free Childcare to pay for childcare on days that you are not working. You can, however, use Tax-Free Childcare for non-working days if your provider requires you to block book (for example, by week) or pay in order to retain a space, or you need access to childcare to facilitate your work.

loki20

Fair enough about the second kid’s tax free childcare account. But from your reply it sounds as if I can top up my first child’s tax free account and that there is no time limit of when I have to use the money in there, is that correct? 

Many thanks.