Universal credit childcare element

[AlRRRR]

Hello

so I recently seen that you can use an OFSTED registered Nanny as a child care provided and claim up to 85% of the cost back from universal credit.

This will work out a lot cheaper for me, so I’m trying to work out how to do it.

There are two options. Are you implying Nanny or I find a nanny who is self-employed and works for three or more families.

The self-employed Nanny would be the easiest as they would invoice me, and then I would pay her, and then I would reclaim the cost back from universal credit.

If I employ a nanny, I have to make the HMRC and national insurance contributions. I know that under Tax Credits, you could give the gross salary under the employment contributions were included.

I am unable to find out if this is the same for universal credit.

I’m wondering if there are any families out there that are employed and Nanny and claim back 85% of the cost up to the maximum amount allowed (currently £1633 for 2 children).

If there any families that have done this, can anybody tell me what is the process please?

A proper nanny share would need a few families that work shifts that allow a share. Do you need a nanny ....they come to your home....or would a childminder be easier to find....you go to theirs?

Hi,

yes for self-employed, Nanny, they would have to be working for three or more families to be legally self-employed.

I’m wanting and Nanny to come and look after my children soley. So this would mean that I am their employer and they are my employee.

They have to be OFSTED registered and I can use a payroll company for that side, but I’m struggling to understand how I can pay their contributions because universal credit look at the net pay…

UC have an upper limit on what they pay. I don't see how you can afford a nanny and be eligible for UC especially as the hourly rate is so much more than a cm

It should be the same allowed costs as for tax credits.
So childcare cost: gross salary + employers NI + payroll admin.
I don't think it includes activities costs, mileage payments that sort of thing.

WTC5 - Tax Credits - certainly did include employer related costs:
"If you employ someone as a registered or approved home childcare provider, for example a nanny, you can get help for up to 70% of the gross costs of employing them – within the limits above. You can include the costs of any: • employer’s National Insurance contributions you pay • benefits in kind you give • other costs linked with employing that person"

From what is on GovUk - https://www.gov.uk/guidance/universal-credit-childcare-costs - it does not seem setup to cover the cost of employing a nanny. Typical of Government not to think of including details of that - have been in Government meetings where I have had to explain what a nanny is, does etc.

So I am interested to see if anyone has gone through this process, has employed a nanny and is claiming UC support for that - and what documentation they are needing to provide to UC. It should be possible, just like it was under the Tax Credits system.

Yeah that’s exactly the information I am after! It was apparently very easy to do this on the Tax Credits, but there’s absolutely zero guidance on how to do this on the universal credit.

somebody said that universal credit said that you have to only do the net , but then how on earth are you supposed to get the tax and national insurance contributions to pay?

I wonder what they meant by net. Surely you should be able to claim the cost of childcare... which would be in the case of a nanny: the gross pay, employers NI, payroll admin, employer pension contribution, mileage perhaps (as nanny may be transporting children to/from school). Claiming for costs of toddler group entry may not be possible but if the children went to a childminder, then the childminder might include that cost on their invoice. So there could be an argument made that it is a reasonable expense to include.

It is a pain that there is no published guidance on this. It is almost as if Government only wants parents to use a nursery!

So basically one parent was saying that universal credit wanted to know what she gets paid net, means after tax and national insurance which is absurd because how on earth can an employer pay the tax and national insurance then. Surely you’re the only way around that would be to increase the NET amount to cover the cost within it, which sounds absolutely insane!

I’ve tried speaking with universal credit and I’ve tried speaking with HMRC and I’ve also tried payroll company is an absolutely nobody knows how to do it

Universal credit will pay up to £1600 for two children.

They will pay 85% of the costs. For two children to attend nursery, full time will be more than double than what it will cost for a nanny. The problem isn’t being able to afford the Nanny, I’m just because somebody is on universal credit, receiving the childcare element. It doesn’t mean that they can’t afford something. You can receive the childcare element up to £30,000 salary.

Hey there,
did u figure out a route through this as im trying to figure it out for myself now.