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  • FIRST POST
    • vacheron
    • By vacheron 12th May 18, 8:15 AM
    • 825Posts
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    vacheron
    Tax free childcare question after stopping work.
    • #1
    • 12th May 18, 8:15 AM
    Tax free childcare question after stopping work. 12th May 18 at 8:15 AM
    Hi all.

    Hopefully someone here has had experience of a similar situation and can offer some advice.

    We have been using the governments tax free childcare scheme for the last few months where the government will top up our payments into the scheme by 25%.

    Every 3 months we have to re-confirm that we are both in work. The maximum government top up for that 3 month period is then 500 which equates to a parental contribution of 2000.

    My wife was told yesterday that her job is being made redundant, however I was thinking that while she is still in work we could top up the account this month with 2000 to get the full 500 top-up and then use this in to pay for any childcare requirements in future years.

    Would this be permitted or would we be breaking any rules if we were to "use" (not receive, as we will have received it while we were eligible) the governments 25% contribution after she has stopped work, or would us declaring we are no longer eligible for the scheme result in them closing the account and returning our balance (minus the government contribution) back to us?

    Any advice gratefully received.
    Last edited by vacheron; 12-05-2018 at 8:18 AM.
    The rich buy assets.
    The poor only have expenses.
    The middle class buy liabilities they think are assets.
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Page 1
    • Icequeen99
    • By Icequeen99 12th May 18, 3:54 PM
    • 3,534 Posts
    • 2,393 Thanks
    Icequeen99
    • #2
    • 12th May 18, 3:54 PM
    • 12th May 18, 3:54 PM
    At the point you pay out the money from the account to the childminder - the main reason for doing so has to be to enable you to be work. As the scheme is new, it isn't clear how closely HMRC will check this or how much scope there is to use it in between jobs while you are looking for work.

    Subject to that main reason test - you can keep on spending the money. If you want to withdraw your contributions, any Gov top-up will be recovered.

    IQ
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