Tax free childcare

[Winterfellismyhome]

Hi all, ive set up an account for tax free childcare and had some questions about how it works. Am i supposed to put the full amount into my account and then the government pays the extra and then that just sits there? Or do i put less than the total in and the government tops it up? I understand how the scheme works but im confused about how the payments work.
Thanks

Bump

Say childcare bill is £100, you put in £80 and the hov puts in the £20.

Its like a bank account so it just sits there and you can withdraw any extra you put in and don't use.

Don'y forget money takes about 3 days to clear then you have to go in and make payment which can take 3 days

It's the second thing you said. Just calculate 80% of your fees, then the gov adds the remaining 20%. Then you pay the childcare from the account

Thats really helpful thank you. How soon do they pay their bit? Do they pay it in time for when the fees are due or only after you've contributed? If i were to put the full amount in the account, would it still be topped up or not?

You get the government bit almost immediately. I have standing orders set up from my bank account into TFC account, and then out to the after-school club etc. Runs like clockwork - I do have a buffer of 1 month's worth of childcare costs in there so the clearing time doesn't mess things up.
Set a diary appointment for re-confirming your details etc every quarter, annoying but they cut it off if you don't do it.

You'll get 20% on top of whatever you put in the account (up to the limit). HMRC don't care what your childcare cost is, it's just a mechanism to get the tax relief on the money.

Yes it would still be topped up, they don’t know how much your invoice is.

Remember to send it on to your childcarer in plenty of time. It takes 3-5 working days to reach them after you authorise the payment.

Ive set the calendar for the renewel. So ive set the nursery up and my sons name so they'll pay it anytime from now? Theres no option to set a payment date or how much my fees are. Sorry im confused

Ah okay i understand that bit now. Thank you

Have you put money in and received your top up yet?

You set it to do the transfer, you have to input how much to transfer and when. It won’t let you do the transfer the same day, so I always pay in at least day before the fees are due, then set the transaction to pay nursery the following day as a one off payment

Heymummee if you aren’t sending it until the invoice due date then your nursery will be receiving it late.

Ive only set the account up today and had some questions. The fees arent due again until the 1st of July so waiting for payday to add to the account. So i assume you add the money to the account first and then the top up gets added regardless of how much the fees are?

?

You add 80% of the fees, and the gov adds the 20%.

We're saying it takes about a week from start to finish. So if you get paid on 30th for example, and you donCt do it till then your fees will be late to the nursery.

Nursery have never told me it’s late. I always check on the day they’ve received it and all fine

Day 1 - you transfer however much you want into your Tax Free Childcare Account. HMRC add 20% to it within a few minutes.

Day 2 - your full childcare fees go out of your Tax Free Childcare account (you should set this up as a standing order if regular)

Up to Day 5 - childcare provider receives full fees payment

Just set it up so that your childcare fees will be safely in the providers account before their payment deadline.

So i assume you add the money to the account first and then the top up gets added regardless of how much the fees are
Exactly. Govt don't care how much your fees are. Mine varies month to month as they charge daily so depends how many Weds-Fridays there are in that month. I get invoices on 1st of the month. I pay 80% of the invoice into govt account that day and it gets topped up to the full amount instantly although funds might not be available till next day.

When they are I log back in and pay the nursery. They then take at least a week to acknowledge it.

Does anyone know if the money that the government put in expire after 3 months? Ie if I put in the maximum £2000 to get £500 back, do I need to spend that £500 within the 3 month period? My childcare costs are less than £2500 per 3 months.

No, there's no expiry on the money the government put in, it's tax relief.