Tax Free childcare - just added my 3rd child and topped up £2000, but only received £384.62 top up... why?

[ChaosAndCuddles]

Hello,

I have been using tax free childcare since 2020 for first my eldest, then my second child since 2022 and now in 2024, I just added my 3rd child as I started back at work after maternity leave.

I topped up my 3rd child's account with £2000, but I have only received £384.62 from the government instead of £500. Does anybody know the reason why? I can't seem to find any answers.

I expect it is to do with the entitlement period for your 3rd child. TFC will align the entitlement period with the entitlement period for your other children.

https://www.gov.uk/hmrc-internal-manuals/tax-free-childcare-technical-manual/tfc20200

"Using the formula X x A / 91, we can work out the maximum Alex can pay into Eric’s childcare account for the varied entitlement period. £2,000 (X) x 31 (A) / 91 = £681. This is the maximum amount of money Alex can pay into the childcare account for Eric that will attract a top-up payment from HMRC."

So if your maximum was £1538.48 which is 4 x the £384.62

Then using the formula £2,000 x A / 91 = £1538.48

A = £1538.48 * 91 / £2000 A=70.0008

(checking formula: £2000 x 70 / 91 = £1538.46)

So is there some reason why your 3rd child is eligible for about 70 days until the next reconfirmation?

Firstly, thank you so much! I need to probably spend more time to read this to fully understand... It is all a bit confusing for me!

I haven't actually topped up my eldest's account since she turned 3 (she is now 4) as she only goes to nursery term time and for 3 days a week, so with 30 hours, my nursery does not charge me at all.

I top up my middle child's every 3 months and my next confirmation is on 15th February - 13th March.

I returned to work on 8th January, so made the payment of £2000 for my youngest on this date.

I will call the helpline to see if they can advise, but I will have to wait till Thursday on my day off to have time. But in the meantime, do you know whether in the next eligible period for my youngest, I'll be able to get the full £500 if I top up by £2000?

Or should I withdraw all the money I put in, and wait for the next eligible period? I guess maybe even withdrawing the extra I put in on top of the £1538.46 (2000 - 1538.46 = £461.54) so that I can use that money in the next period and get a percent back?

I would call the helping and ask before doing anything. You need to know why you did not get the full topup, I reckon it is to do with aligning the eligibility period but I am not certain. Then you need to know if you can take the portion out which did not get topup, plus what happens when you pay in next period.
Hopefully it will become clearer when you talk to the helpline.

8th Jan + 70 days is 18th March, so not quite in the time frame you have written, but close. So it could be to do with that reconfirmation period timing.

For anyone who ever comes across this, as the helpful poster wrote above, it's due to eligibility periods. I was told by the helpline that it will balance out, so next period, I will be entitled to over £500.

Thanks for the update. Good to know they balance it out in the next eligibility period.

ChaosAndCuddles were you given above £500 in the next period in the end? I have had the same situation with my second child, only receiving £236 in the first period, but we've had the standard £500 the subsequent quarter.* *

Hello so my case is similar and I’m confused. If someone could please offer advice I’d be grateful. One of my children’s tax free is showing the full £500 however my 2nd child who is a new account has only just started nursery this week and was confirmed eligibility on 17th August has only been given £382 does anyone know why this is?.. I also have to reconfirm by 17th October so only two months not three. Thank you.

Is the reconfirmation for first child also in October? It could be to align both children so you don't reconfirm for each individually.