Tax free childcare or vouchers

[MumOfBoys16]

I can't get my head around which is the better scheme.. can you help!

I currently have a childcare vouchers scheme where I can pay no tax and NI on £243 of bills.

I'm about to return to work with my second child and I'm w9ndering if it's better to switch to tax free childcare.

The month bill for nursery is £500 (well rounded up to make it easier.

So for tax free I'd save 20% on all of that amount. Making it £400 a month.

For childcare vouchers I only make the savinģ on £243 (I think I save £73 from reading online).

So I think tax free childcare is better for me..... am I right?

There are some online calculators you can use to check which is better for you.

Tax Free Childcare is until the child is age 11 ish (stops the September following their 11th Birthday). Childcare Vouchers is until age 16.

Tax Free Childcare is per eligible child, Childcare vouchers is per eligible parent.

Tax Free Childcare is a maximum topup of £2000 per year/£500 per 3 months, per child account.
Lets say your nursery bill is £6000 per year, you could pay £4,800 of that and TFC would pay £1200. So you are well within the maximum limit.

Childcare Vouchers is dependent on your employer, if you change jobs then you are no longer eligible for Childcare Vouchers (as the scheme has closed to new entrants).

We do not know what childcare costs you have for your first child, possibly that is zero but there may be some eligible costs.

Your savings with Childcare Vouchers are around £892... assuming you are a lower rate tax payer. Your annual savings with TFC could be up to £2000 per child. Based on your current estimated nursery cost, you are likely to save £1200 per year.

GovUk Childcare Calculator might help you to decide.

Thankyou, that's really helpful. That's about how I'm working it out too but the government calculator makes it sound like I save more with the vouchers.