Tax credits and childcare vouchers

Woby_Tide

not all the £280 will be towards the childcare and will also include the other elements I would have thought. But ring and ask them, they will know best

[Deleted User]

woohoo wrote: »

Hi,
I think I had better ring them then Daisyflower..!
Is there a formula I can use to estimate the amount I may have been overpaid? I get £280 a month from tax credits towards £120 a week childcare? How will they work it out - can anyone give me any idea? Will it be thousands? Oh NO!!! I am too scared to ring them - I don't know how I can pay it back? I never meant not to tell them - If they had ever asked I would have said......! Will they tell me on the phone or will I have to wait for a letter?
Sorry to ramble...........

When did you start claiming the childcare costs?
When did you start receiving the vouchers?
How much do you pay in vouchers?

You need to give this information ASAP. They wont be able to tell you on the phone how much you have been overpaid. If it has been for a quite a while they will also need to refer it off to a specialist team to sort out the details from previous tax years as those awards will be finalised already.

If you receive less that the minimum family element of CTC they will usually only deduct 10% or 25% of your award every week to pay back the overpayment. But also be aware that your payments will decrease as you wont be claiming the costs any longer.

machairs

This has been an interesting post and got me thinking....If say TC paid 80% of Childcare which I believe it the maximum, could one use voucher for the balance?

According to Martins article, a saving of £30 per £100 sacrificed can be made so is it correct to say £243 of vouchers would only cost you approx £180 in "real money"? Why then do you have to deduct the whole £243 from what you claim from TCO when the tax break you receive is only just over £60?

lucysmumwork

I have realised I am in the same situation - its very scary but all I can do is ring them and tell them and deal with it. Im sure there are lots of peole in the same boat but with me leaving to go on maternity leave to have baby 2 in six weeks its not the best timing but nevermind!

[Deleted User]

machairs wrote: »

This has been an interesting post and got me thinking....If say TC paid 80% of Childcare which I believe it the maximum, could one use voucher for the balance?

According to Martins article, a saving of £30 per £100 sacrificed can be made so is it correct to say £243 of vouchers would only cost you approx £180 in "real money"? Why then do you have to deduct the whole £243 from what you claim from TCO when the tax break you receive is only just over £60?

No you cant just pay the difference in vouchers. If you used vouchers you would have to declare the costs you pay minus the amount in vouchers.

You receive the tax break on the vouchers but you also dont need to declare the amount on your renewal each year that you spent on the vouchers.

So for example, if you had earned £15,000 and spent £1,000 on vouchers you would only declare £14,000.
You would be receiving up to 80% of your childcare costs weekly and because you are not declaring the £1,000 you spent on vouchers you are also getting an extra £390 in Tax Credits (If you declared the £1,000 you spent on vouchers as your income, 39p in the £1 would be deducted from your total award).

lucysmumwork

subsoniccoyote, I get the part about delcraring your vouchers and taking that sum off your yearly income, like you say if you earn £15k and take £1k in vouchers tell them you earnt £14k. BUT say your childcare is £100 per week, you cant then tell TC that you are paying £100 per week to the nursery because you arent because you are claiming the vouchers? Say, after vouchers that mean that £10 per week was paid out of my own wage ie the £14k THEN I tell TC that figure, not the £100?

woohoo

Hi again,
I am really confused.......
I have my award notice in front of me. Can you tell me which part of the award will be reduced by claiming vouchers? I have no working tax credit element, less then £2 child care element of WTC and an award of £3800 child tax credit. This is made up of 2 qualifying children and the basic family element of £545? If I claimed vouchers for the whole year how much roughly will I pay back. I didn't claim any vouchers before that.
I never used to receive any award apart from the basic family element until I went on mat leave and that year earnt a small wage. The tax credit then kicked in. In fact, it never occured to me that I could claim anything, I just rang up to give my earnings for the year and got money paid in to my bank! I was convinced it was wrong and rang several times to check it was really mine! No-one ever asked about the vouchers and I never thought to tell them . This year I believe I will get only the basic £545 again. The vouchers do not affect this i presume? As I will not be getting any child care costs.
I just need some idea of how much I have to pay back. Like a previous poster said - I am getting £60 ish a month tax break from the vouchers only and potentially will have a big repayment (although I hope it won't be). I have never reduced my income either to account for the money spent on vouchers??
I just think it would be easier for people if they asked you when you phoned if you get vouchers! This wouldn't have happenned to me then.

lucysmumwork

Hi Woohoo yes I agree, looking back through my awards last night it took me and my husband a while to get our heads round it. We are both professionals with brains yet we still fell into the trap. It really isnt clear from TC, though the way it is explained above is. It just feels like you get it in one hand and taken out of the other.

woohoo

Absolutely lucysmumwork!

[Deleted User]

lucysmumwork wrote: »

subsoniccoyote, I get the part about delcraring your vouchers and taking that sum off your yearly income, like you say if you earn £15k and take £1k in vouchers tell them you earnt £14k. BUT say your childcare is £100 per week, you cant then tell TC that you are paying £100 per week to the nursery because you arent because you are claiming the vouchers? Say, after vouchers that mean that £10 per week was paid out of my own wage ie the £14k THEN I tell TC that figure, not the £100?

Not sure exactly what you are asking - if you are asking if you would declare the difference between the actual costs and the amount paid in vouchers this would be fine,
for example if your Nursery costs were £100 per week and £70 was paid in vouchers you would declare the remaining £30 as your weekly amount to TCO.