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Can anyone explain tax free childcare please? How long after I pay in do they pay in? (Accounts set up already)

(18 Posts)
Hmmmmminteresting Mon 01-Jul-19 21:13:22

I've had confirmation today that my 2 x DC (age 1 and 3) have had their tax free childcare account set up but I'm really confused as to how it works with payments. I will cancel my childcare vouchers tomorrow but then I get paid 28th and nursery have to be paid by 1st. If I transfer the money in when will the tax free side go in? Will it be before 1st?
If my nursery fees are £1245 a month, how do I work out how much the govt pay?
I'm not normally stupid but on this subject I'm stuck! blush
If anyone can help I'd be grateful :-)

Spam88 Mon 01-Jul-19 21:19:01

The government top up is available as soon as your money is in the account. It can take up to 7 days after you make the payment to your nursery for them to receive the money though so make sure you pay in plenty of time. In my experience it takes a few days for the money to show up in the account after I've transferred it in as well (but maybe I'm just used to having instant transfers between my accounts with the same bank).

You need to put in enough to cover 80% of the fees and then the government top up will cover the other £20. So you'll need to put in £996 to cover your £1245 fees.

Hmmmmminteresting Mon 01-Jul-19 21:30:15

@Spam88 thank you so much! That's great. I may ask the nursery for a bit of an extension in case it's notthere on time then. They say pay 1st which I always have however surely I cant be the only one in the situation where I dont have enough time to cover it?!

MilkLady02 Mon 01-Jul-19 21:35:22

I’ve just set mine up today and thought exactly the same as you! I put money into the account and the extra 20% showed up immediately, but it’s not available to use straight away. Not sure how long it will take as I only added the money in this morning, but I tried to pay childminder today and it won’t let me yet! It’s odd that this info isn’t available on the website before you set up the account!

MilkLady02 Mon 01-Jul-19 21:36:48

My childminder was aware that there would be a delay with anyone paying by this method and is very understanding. Hopefully your nursery will be too. They must have other parents using the scheme.

legalseagull Mon 01-Jul-19 21:42:10

Amount on invoice x 0.8 = amount you need to pay in.

I always pay my money in on 28th and tell the website to send a one off payment on 1st. I do this each month and it's always worked on time

Ivyleaf4 Mon 01-Jul-19 21:49:41

Message withdrawn at poster's request.

Spam88 Mon 01-Jul-19 21:54:37

The government pay in 25% of what you pay, which works out at 20% of the bill.

Hopefully your nursery will be understanding! Our fees are to be paid by the 1st but no late fees are incurred until the 7th.

Ivyleaf4 Mon 01-Jul-19 22:00:55

Argh sorry, I was sure the government paid 20% of what you pay not 25%... I've reported my own post for giving incorrect info!

Hmmmmminteresting Mon 01-Jul-19 22:09:07

Thanks that is all really helpful. I pay in £8 and the govt pay in £2. So that's 20% is that right? Is the x 0.8 calc correct ?

spinn Mon 01-Jul-19 22:20:08

If you pay by standing order/bank transfer - It would take 2 days to show, id set payment to leave the next day and childminder would get it a couple of days later. (I send Monday, childminder usually gets it on Friday).

Tonight I logged in and paid money in by card and it showed immediately for me spend.

As soon as your money shows, so does the extra 20%

So yes, you pay in £80 and the balance shows as £100 available to spend.

I'd recommend putting £10 or so in first to make sure it shows and you've got it sorted before you cancel any vouchers etc.

Hmmmmminteresting Mon 01-Jul-19 22:25:58

Spinn that makes sense, thank you. I've just emailed the nursery manager and asked if it will matter if the money isn't there on 1st. In 3 years I've never ever made a late payment so hopefully she'll be understanding! It's crazy, moving to this from childcare vouchers is saving us well over £200 a month shock only I could claim vouchers before and not dh, and was limited to £243. Having 2 in nursery 4 days a week means this tax free account is so much better for us!

Sauvignonblanket Mon 01-Jul-19 22:32:03

Just to add there is a maximum amount for each period (which I think equates to 3 months). Depending on how expensive your fees are you might run up to the limit and therefore not get the full 20% all the time.

Hmmmmminteresting Mon 01-Jul-19 22:36:07

Hi @Sauvignonblanket I've just seen that, it's £500 per quarter and based on my 1yo fees being £752 a month, I work that out that I will pay £602 a month meaning that over the quarter the govt pay in £450 so I think I'll just make it. The rest of the bill is for my 3yo but his fees are smaller so I should be okay. As I think its up to £500 per child (I hope!)

Sauvignonblanket Mon 01-Jul-19 22:43:52

Yes - up to £500 per child, not between them, so you should be fine. I find it a really good system.

nannynick Tue 02-Jul-19 05:49:29

Please allow enough time for money to clear. The account should show cleared funds amount. Can anyone confirm that parents now see the amount they paid in AND the amount of cleared funds? A payment in via debit card will show instantly but is not cleared instantly, it can take a day to clear.
Payment to childcare provider takes around 3 working days. If payment is due to provider by end of month, aim to have your payment in by around the 23/24th if you can to allow enough time for clearing and transfer.

spinn Wed 03-Jul-19 06:56:41

Just seen you mentioned you have 2 kids....you pay in separately per child and pay provider separately (I think each child has a quarterly 500 limit but don't quote me on that). You May need to do some maths before payments go through.

Once you get to the 30 hours free, this also goes through tfc so being set up now helps that.

Jsr84 Fri 23-Aug-19 22:10:39

If anyones struggling to work out how much then need to pay into their account, I've found the following site to be really useful!

taxfreechildcarecalculator.com

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