Tax free childcare and 30 hours

[taxfreechild]

I have just taken a new job that increases my salary. Its a much more stressful role with longer hours.

My dd is 3 - school this September.

Because I contribute about 20% of my salary to my pension (as I do now on lower salary) I will have a taxable salary (after those contributions) of just under £100k, so as I understand it I should still qualify for the tax free childcare and free hours.

If I exceed certain targets I am also entitled to a bonus worth an additional 40% of my salary. Paid as a one off lunp sum. There is no guarantee I will hit those targets, - particularly as I am a new starter. They are a cliff so you either qualify and get all of it or you get nothing extra. I won't know whether I am on track until November time (given I am a new starter) and even then it remains discretionary.

How does HMRC address this - does anyone know? Will they look back? The guidance isn't clear as you have to reconfirm based on your expectation.

You have to reconfirm every 3 months so at some point in one of those re confirmations you will know or be realistically expected to know

Yes, I know that. But by that stage I will have already had the benefit in the tax year.

OH was made to repay TFC the following year via his self assessment (which you have to do once you go over £100k) when his bonus took him over. I’m not sure what happens with the funded hours as we stopped claiming before they kicked in for DC. It’s more complex as there isn’t a precise monetary value attached to those.

I thought that might be the case. In fact, the 30 hours are more important to me as our top up is very small.

For anyone else wondering about this I found this guidance. I think that the 30 hours you have a grace perood.

https://assets.publishing.service.gov.uk/media/6172900ae90e07198018f9a1/Earlyyearssentitlements-operationalguidance33.pdf