Accessing 15 Hours Free Childcare when taking a new job under the £100k threshold

molenpad

Hi all, 

I am in a bit of a weird position where I currently earn £105,000 per year, my partner earns £30k - but obviously due to my salary we cannot claim the 15 hours free childcare for our 18 month old.

However, I'm currently going through a restructure at work where probably redundancies are being briefed at the moment.

As part of consultation and a redeployment package I have been offered a new role in the company which would start from mid-January, should I accept it, but the salary is lower - quite some way under £100,000. We could make this work financially with some adjustments.

But I am unclear whether I would immediately be able to claim the 15 free hours at the point of starting a new role with a salary that is beneath the £100k threshold because my tax history would show for previous tax years I've earned over £100k.

I would obviously be able to prove (through contract or payslips) that my new salary is below the threshold but I'm uncertain whether this gives me eligibility and I don't want to fall foul of the HMRC which would ultimately put me in a worse position.

vacheron

They won't be able to asses eligibility (or lack thereof) until the end of the 24-25 tax year. Have you not considered making additional pension contributions so that you end the year with just under £100K by April?

It will also get you out of that awful 60% tax trap between 100-125K.

This video is well worth a watch from about the 12 -15 minute mark. 

pmlindyloo

I am wondering if your circumstances would fall under 'starting a new job'.

Have a read of this:  Apply for free childcare if you're working - GOV.UK

Scroll down until you find the heading  'Starting work or starting a new job.'

Nurseries seem to be very 'with it' as regarding the new rules so it might be worth asking there if you cannot contact HMRC.

Yamor

You can make a declaration of eligibility if you "expect" your income this tax year to be below £100k. Depending on the numbers involved, if your new role only starts in Jan, then your overall income for 24-25 may still be over £100k. You would need to confirm that.

HMRC may come back and query it if they notice that in recent years you have generally been above that threshold, but they should be satisfied with your explanation.

HillStreetBlues

A quick work out I make it that if starting mid Jan the new salary would be about £61.5k or lower.
See below.

Yamor

If they were on £105k, then 2.5 months at a salary of £81k would be enough to bring the overall annual earnings to £100k:

£105,000 / 12 * 9.5 = £83,125
£81,000 / 12 * 2.5 = £16,875
£83,125 + £16,875 = £100,000