Losing the will… please can anyone explain how to set up the tax free childcare account?!

[User5680]

I really don’t get it! Do you pay in what you can and they top up 20% of that? Is there a deadline in the month it must go in by? Do you have to link the account to your chosen nursery so the government know it’s spent on childcare? So stressed

You pay in and then it is topped up by 20%

There is a maximum top up amount per quarter of £500. Every time you pay money in the extra is added until you reach that limit.

You pay your childcare provider directly from your tax free childcare account.

When you set up the online account, you have to select the nursery to link it for payments. Once you get an invoice from the nursery, pay in 80% of the total amount into the tax free account. The government will then top up the 20%. Then you set up the payment to the nursery. Most nurseries require payments in advance, so by 1st of each month. Hope that helps :)

@Bringmethesleep thank you, how soon does the gov pay in? Say my bill is 1k, I pay in 800 and wait for the 200, then send it to the nursery?

Its less a bank account than a holding bay.
You pay money in, the government adds 20% to that every month. (Up to the limit that I can't remember right now!)
You then connect that 'account' to your childcare provider/s for that child. Your childcare provider will give you their code.
You can take money back, but they will then remove the 20% contribution for the amount you take back.

If you have more than one child, they each have they're own 'account ' you have to pay into separately. But all are accessed through your government gateway login.
Only one parents has control of them.

You can then either set up a regular payment to your childcare provider, or pay monthly (as we do as nursery bill changes each month) through that account.

It makes sense to just use the account and not try and pay half through that and half through bank etc even if you're over the limit.

Same day :)

They add the 20% relatively quickly- a few days at most later. So you do need to be aware of that delay when working out when to pay nursery

I never get the 20% same day! 🙂

@Whattodonut thank you! Dd starting in October. If I paid some in for the next few months would that have it stored up to go out for future bills or will the gov no allow that?

And the money I pay in doesn't usually arrive same day either. I have a standing order to slightly overpay the bill.

I normally pay in by standing order a few days after I get paid, it gets topped up pretty quickly, and I have a regular payment to the nursery set up a few days after that. Then I don't have to think about it.

Yes, you can store it up. I pay into mine as soon as I get paid. The extra gets added when your payment clears so usually a couple of days. My childcare bill is at the end of the month so always cleared in good time to pay straight away. You might have to work out a rough amount for the first few months but after a while you get a good idea of how much to put it. It carries over so not an issue there. And you can withdraw it (obviously minus the top up).

Yes thats what we do. And its sensible as like PP said- its £500 a quarter. So might as well get the most from this quarter too. Wish I'd started earlier.

Oh and I know these are just examples, but if those were the real numbers, you wouldn't get £200 top up every time, because they only top up to a max of £500 per quarter. So in that example, you'd get £200 the first two times, but only £100 the third time. So you could either pay in £900 every third payment, or do what I do and make three equal payments to cover the equivalent of three months' nursery fees minus £500.

Technically I don't think your supposed to set up the account unless they are starting at childcare in the next 30 days - don't know how they would know that though

We built up a bit of a 'bank' when DS was doing less days while I was on mat leave in advance of him going back full time

It doesn't reach the nursery or childminder the same day though, it's at least one day, usually more and never over the weekend or bank holiday.