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Original poster

HMRC suddenly refusing us tax free childcare when nothing had changed

32 replies

Maternityleavelady · 19/01/2026 21:06

Our salaries haven’t changed and out of the blue (after 5 years of tax free childcare), HMRC have said we no longer qualify because they don’t think we will earn the required £846 per month. We have sent them our bank statements and payslips showing historical earnings and confirmed that nothing has changed. They confirmed again that they don’t think we will earn enough. The reply says if we want to appeal we have to go to court!

Is this their attempt to save money? Are they using AI and the algorithm is all wrong? Has anyone had the same issue and successfully had the decision over-turned?

OP posts:
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Original poster
Maternityleavelady · 22/01/2026 22:42

Update: we reapplied from scratch again rather than appealing again fruitlessly - and were immediately approved! Bonkers

OP posts:
EsmeSusanOgg · 21/01/2026 09:39

Nickyknackered · 19/01/2026 21:52

Sounds like she knows the rules since she's already been claiming for a while and nothing has changed for them.

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HMRC will use the P60 data sent by her employer to ascertain the details. It is possible they have either 1) sent incorrect PAYE data 2) something has reduced income to below the threshold - this can happen with some salary sacrifice schemes.

If OP is in Self Assessment. It may be that have filed incorrectly.

Original poster
Maternityleavelady · 20/01/2026 08:50

Limesand · 19/01/2026 23:04

This happened to us recently after my husband had been self employed for about a year. I gave up with trying to contact them and appeal etc and just started the whole thing again and it went through no problem.

What a pain - I think we will have to do the same - but glad you got there in the end! We have already had to pay some fees without our discount but hopefully can at least get it reinstated before the next bill is due.

OP posts:
LuckyNumberFive · 19/01/2026 23:16

Applecup · 19/01/2026 23:13

Can you afford to see an accountant and get them to give advice about payroll.

Why would OP need this? If she's genuinely self employed she can't be on her own payroll.

Applecup · 19/01/2026 23:13

Can you afford to see an accountant and get them to give advice about payroll.

Original poster
Maternityleavelady · 19/01/2026 23:09

Clairey1986 · 19/01/2026 22:47

If you are both self employed how do you have payslips?

One client is a regular fixed monthly amount so it’s a sort of statement/payslip. They rest are invoices/bank transfers

OP posts:
Original poster
Maternityleavelady · 19/01/2026 23:07

NeverDropYourMooncup · 19/01/2026 22:46

Did you get invoices paid early in December, so they are assuming you've both doubled your salaries by having two paydays within 3 weeks?

Edited

Will double check this but I don’t think so - invoices fairly evenly spaced

OP posts:
Limesand · 19/01/2026 23:04

This happened to us recently after my husband had been self employed for about a year. I gave up with trying to contact them and appeal etc and just started the whole thing again and it went through no problem.

Original poster
Maternityleavelady · 19/01/2026 23:04

PurpleFlower1983 · 19/01/2026 22:40

Do your tax returns reflect that you are both (separately) earning over the threshold?

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Yes

OP posts:
Clairey1986 · 19/01/2026 22:47

If you are both self employed how do you have payslips?

NeverDropYourMooncup · 19/01/2026 22:46

Did you get invoices paid early in December, so they are assuming you've both doubled your salaries by having two paydays within 3 weeks?

ScaryM0nster · 19/01/2026 22:44

Before appealing again - make sure your self employed tax info is up to date on earnings.

PurpleFlower1983 · 19/01/2026 22:40

Maternityleavelady · 19/01/2026 22:22

Both self employed

Show quote history

Do your tax returns reflect that you are both (separately) earning over the threshold?

Original poster
Maternityleavelady · 19/01/2026 22:22

PurpleFlower1983 · 19/01/2026 22:22

You both have to be earning over the threshold. Are you PAYE or is one of you self-employed?

Edited

Both self employed

OP posts:
PurpleFlower1983 · 19/01/2026 22:22

You both have to be earning over the threshold. Are you PAYE or is one of you self-employed?

Original poster
Maternityleavelady · 19/01/2026 22:22

hahagogomomo · 19/01/2026 21:56

@PetPeevert that’s for 3 months not one month.

as minimum wage has risen op the minimum amount you have to earn has increased. If you were very close to the minimum have you dropped below?

We were not close to the threshold so it’s baffling

OP posts:
Original poster
Maternityleavelady · 19/01/2026 22:19

Jellybunny56 · 19/01/2026 21:38

This.

I’d ask for the information they have based their decision on if you have already provided clear evidence to show your earnings.

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It’s all very automated - we are not dealing with a human here. When we ask questions we get nothing back. We can appeal (again) or go to court!

OP posts:
Original poster
Maternityleavelady · 19/01/2026 22:17

FatFoxie · 19/01/2026 21:27

How much are to likely to earn? Has th threshold changed?

Well over the £846 threshold - one working full time, one working part time.

OP posts:
hahagogomomo · 19/01/2026 21:56

@PetPeevert that’s for 3 months not one month.

as minimum wage has risen op the minimum amount you have to earn has increased. If you were very close to the minimum have you dropped below?

PetPeevert · 19/01/2026 21:54

Thanks for clarifying

Walkacrossthesand · 19/01/2026 21:54

@PetPeevert I read it that that’s the 3monthly amount - hence around £200pw

Nickyknackered · 19/01/2026 21:53

PetPeevert · 19/01/2026 21:51

Are those figures right? £2539.68 x 12 = 30,476.16, before tax.
That's definitely more than minimum wage and more than I earn!

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Its per 3 months, not monthly.

Clefable · 19/01/2026 21:53

PetPeevert · 19/01/2026 21:51

Are those figures right? £2539.68 x 12 = 30,476.16, before tax.
That's definitely more than minimum wage and more than I earn!

Show quote history

It’s over three months, so it would be multipled by 4, not 12.

Nickyknackered · 19/01/2026 21:52

EsmeSusanOgg · 19/01/2026 21:38

The lower earning threshold is based on earning minimum wage working 16 hours a week.

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Sounds like she knows the rules since she's already been claiming for a while and nothing has changed for them.

PetPeevert · 19/01/2026 21:51

EsmeSusanOgg · 19/01/2026 21:40

From GOV.UK - https://www.gov.uk/tax-free-childcare/check-if-youre-eligible

You (and your partner, if you have one) must each expect, over the next 3 months, to earn at least:

  • £2,539.68 before tax if you’re aged 21 or over (the same as £195.36 per week)
  • £2,080 before tax if you’re aged 18 to 20 (the same as £160 per week)
  • £1,570.40 before tax if you’re under 18 or an apprentice (the same as £120.80 per week)
This is the National Minimum Wage or Living Wage for 16 hours a week on average.

Are those figures right? £2539.68 x 12 = 30,476.16, before tax.
That's definitely more than minimum wage and more than I earn!

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