Paying nanny through tax free childcare - expenses?

[Ogs]

I'm looking for advice on paying our nanny's expenses. Our nanny is Ofsted registered and we take advantage of the tax free childcare scheme. We use Nannypaye for payroll services then pay Nanny net pay and PAYE/NICs to HMRC using the scheme.

Our nanny submits expenses every month and I've just been giving her a direct bacs payment for these. It's things like lunches out, toddler classes, soft play, mileage etc.

My question is..am I allowed to reimburse her for these expenses through the tax free childcare scheme? These items are not physically on her payslip so I don't know whether it's allowed? Cannot find advice on this online so any insight would be fab! Thanks

Great question. No idea on the answer.

If the cost is strictly due to providing childcare, then I feel it should be something that could be included.

Paying for theme park passes for all the family and nanny, I feel would not be justifiable. Paying for theme park passes for nanny and the children, that is justifiable. Travel costs to/from a museum, to toddler groups, I wonder what is a reasonable activity which can be included in the cost of childcare.

What happens with childminders and nurseries, are outings included in fees or charged as extra and if so can they be included in TFC claim?

Does TFC ever check... I've not had them ever ask me about any payments parents have paid me as a childcare provider.

I typed a long reply and the browser crashed before I could push Post.

So I will try a shorter one.

From the Parents Guide (Part 1):
"You can only use your Tax-Free Childcare payments to pay for extras, such as lunches or trips, if they’re part of the childcare costs you’re paying."

What do they mean by that? Could it be that they expect it to be in the main fees charged by the provider? How would that relate to a nanny who is an employee - maybe it means that it needs to appear on the payslip?

If they were to check, then any non-care payment may be rejected and you may be given a penalty. So if you claim it, keep records and notes so you can justify it as 'childcare cost' rather than being non-care.

Thanks. You'd think it would be made clear on the guidelines. Such a minefield on what is acceptable. I just didn't know if they cross check the payslips with the amount that is paid out of the TFC account.

Nanny expenses are approx £70 a month so it isn't a huge amount we're talking. She has just renewed her Ofsted registration though which we reimburse. Would be interesting to see if this is allowable through TFC?

I might see if I can make a call to the TFC helpline tomorrow. Will report back if I get any solid confirmation!

Thanks again for your input.

I'd have said no because reimbursement of expenses isn't taxable income. If you were giving her a flat (say) £100 expenses they'd be taxable so you could buy if you give her an exact figure that's she's paid out for child costs then no

How does it work with a childminder? If the childminder takes children to a softplay and charges the parents, can the parents claim that as part of their childcare costs?