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Tax-free Childcare

(18 Posts)
vinoandbrie Mon 03-Apr-17 12:06:01

Hi, I have a question on tax-free childcare that I can't seem to find an answer for in the literature already out there.

I understand that through putting money into a designated account it will be topped up, and I can use that money to pay towards my 'childcare costs'.

Some of my childcare costs consist of PAYE and NI that I deduct from my nanny's gross wage, and some of my childcare costs consist of employer NI on the nanny's gross wage. Obviously this all gets paid over to HMRC.

My question is, do these payments to HMRC count as 'childcare costs' for the purposes of the 'tax-free childcare' scheme?

We currently use childcare vouchers and I'm trying to weigh up what would be most cost efficient for us in terms of childcare vouchers or tax free childcare.

nannynick Mon 03-Apr-17 13:16:58

Yes. BAPN (www.bapn.org.uk) has been working closely with HMRC Tax-Free Childcare team to enable parents to include paying HMRC the Employers National Insurance, Employee National Insurance and Income Tax.

Exactly how that will work I have yet to see. If any parent is on trial scheme and pays a nanny via the scheme, please do send me a PM.

vinoandbrie Mon 03-Apr-17 14:52:14

Thank you Nannynick, it had crossed my mind that if anyone would know, you would know!

BadgerFace Wed 17-May-17 15:11:21

This is interesting to read, I had not thought about paying the Employer's NI through the scheme. Employee's NI and PAYE I would expect to be able to pay as technically I am paying that to my nanny but withholding to pay to HMRC on her behalf so it constitutes her pay.

I have just set up a Tax Free Childcare account so will let you know in due course nannynick if you are still interested? Although I'm currently having problems with the account as it can't find my nanny as a payee option even though she has registered...

vinoandbrie Wed 17-May-17 16:10:37

Re finding nanny as a payer option, I had this issue last week.

What worked as a search in the end was her ofsted reg number space start of her postcode space second part of postcode

I.e. EY1111111 A12 3BC

nannynick Wed 17-May-17 18:17:24

Yes, to find a nanny (or childminder with withheld details) you need two bits of information - Ofsted URN and Postcode often works.

I would love some screenshots of the parent side of the portal. I have been told by TFC that the option is there to pay HMRC but I would love to see how to find that option.
Would also like to see how easy or hard it is to pay a nanny using the system.

BadgerFace Wed 17-May-17 19:46:41

I got there this afternoon in the end after a call to the helpline, thanks both. The instructions are not clear at all that you should use two bits of info in the search box!!

I'll send you some screenshots NN next time I can muster the energy to go through the rigmarole of logging in again... I probably won't make any payments until August as I'm running off my childcare vouchers for June and July.

vinoandbrie Wed 17-May-17 19:48:26

I will be trying next week and will let you know.

I am very nervous as the site seems to be experiencing a lot of 'technical difficulties' and I keep getting error messages stating this and not allowing me on.

I need to put in a four figure sum, and then pay our nanny next week, and am worried in case I put in the money and then it chucks me out and I can't access it again in time to pay her etc. I'm paying her a bit earlier in the month than usual, to try to ensure I can get her paid on time... wish me luck!

QforCucumber Wed 17-May-17 19:51:28

vino ive made 2 payments using ours so far and had no issues, both payments received by nursery bank account 4 days after confirming on the site. Hope your issues resolve soon. Unfortunately no experience with nanny payments as ours is nursery.

nannynick Wed 17-May-17 20:18:06

Good luck Vino. Doing the payment early sounds like a good idea.

BadgerFace Thu 18-May-17 13:44:47

Vino I just put some money in as a test and it was much easier than using the rest of the site! It appeared in the account straight away with the 20% government contribution added.

BadgerFace Thu 18-May-17 13:48:25

Although I can see no way to include HMRC as a payee so not sure how the quarterly payments to them for the nanny's PAYE/NIC are supposed to be paid...

BadgerFace Thu 18-May-17 13:58:31

Nick here are some screen shots of the main page for your info plus the children's summary and the single child page.

BadgerFace Thu 18-May-17 13:59:50

Screenshots

nannynick Thu 18-May-17 19:49:14

Many thanks BadgerFace.

I wonder if HMRC are under the Add Childcare Provider option, so are added that way. I expect it will be some kind of work around as it was a late addition to the system.

BadgerFace Fri 19-May-17 07:50:54

I tried that Nick and neither HMRC nor HM Revenue & Customs came up. I'm lucky that I've got until October until I need to use the account so hopefully it will be sorted by then but some parents will need to pay HMRC by July...

The other potential problem for parents which I've just come across is that it takes 3-4 days for a payment to reach your childcare provider which means you have to fund a month in advance which is expensive on entering the system. We currently pay our nanny on the 28th which is the day we get paid but we're going to need to fund our TFC account by the 24th in the first month we use it...

nannynick Fri 19-May-17 11:42:58

I have emailed TFC to ask where the HMRC payment option is as people will need it in July and some may need it every month.

The payment delay is similar to childcare vouchers but I feel it will be an issue for some as it is all the nanny's salary not just part of it.

They would not do Faster Payment, they use BACS credit and BACS refuses to tell me why that takes 3-days. Anyone reading this work for BACS and want to say why there are different time periods? Is it due to BACS charging fees to companies/organisations - with higher fee for quicker payment?

BadgerFace Fri 19-May-17 18:09:02

I always thought that the point of a BACS payment was to make it happen that day!

We've never had an issue with CCV taking too long as my employer 'buys' them the week before payday so they've always been with nursery for my eldest by the 28th.

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