Another one about vouchers v tax free!

[Myanna]

Sorry in advance, I know there have been lots of Qs about this but I'm still confused!

Basically, which scheme is better fir higher rate taxpayers with two kids in full time nursery?

We have a 3yr old and 3m old. I'm on mat leave but will be going back full time so they will both be in nursery. Approx cost £1,500pm after the free 30hrs.

We are both higher rate tax payers.
The hmrc calculator does not work if you pay higher rate tax! So I'm not sure how to work this out.

Currently have childcare vouchers and have applied for tax free instead, but now I think maybe we would be better sticking?

Complicated further by my salary including bonus being close to £90k, so if I got a good raise I could go over the £100k threshold and not be eligible for 30hrs or tax free childcare. But that may not happen soon/ever.

It depends on the cost of childcare. Tax free childcare adds 20% to your pot to a total of £2000 per child. Your tax status doesn't come into it. Your vouchers will save you around £620 per year per parent (if you both contribute). So if the 20% top up would be more than £1,200 you will be better off under the new scheme. However if it is marginal and you think you are likely to top 100k soonish then you should stay in vouchers as you will lose that option from the end of the month and will also lose your and your dp's ability to use any scheme.