Tax Free Childcare accounts. How and when do you tap it up? Can’t get my head round it

[sellotape12]

Our monthly Nursery bill in London is £1348. I can’t get my head around using the Gov Tax Free Childcare account, such as when you input the money and how to make sense of their cap of £500.
Obviously the government pays you a maximum of £500 over a three month period. But our bill comes in monthly, not three monthly. How do you know how much to put in each month? At first, I was going to deduct 20% from our Nursery bill and put that in, but they told me it’s is still too high.

I would like to get to a regular thing rather than having to change payments amounts every few months. My head is too fried to work out a new calculation every so often. Do you have a system that keeps you sane?
*(on top of this I’m battling the scheme because they’ve only ever paid me once in nine months that I’ve had the account open and it’s impossible to get through to them.)

https://taxfreechildcarecalculator.co.uk/

Times your monthly bill by 12, take away £2,000 (the max yearly top up), divide that by 12. That's your new monthly cost to put in.

For you, if you put that much in each month, each three months the first month you will get more top up than you need to make the monthly bill, but that's fine, you won't get any in the last of the three months but overall you should have enough.

Thanks, that’s a really helpful tool. According to that tool I should deposit £ 1086.41 . But that means I’ll use up the Government £500 cap quicker than over three months.
What I meant was, I’m wondering how everyone uses their own account so they don’t have to manually alter their amounts each month? Am I being stupid?

I do work out each month what I need to put in as my bill changes each month and what the government will add to it. So for you you’d need to add £1125 and the government will pay the rest which would be £223 each month, as you can only have £500 paid over 3 months you can either do 2 months using the add on and then every 3rd month pay pretty much all of it OR you do the same each month - the government will pay £166 per month so you need to add the rest into the account. I only add what I need when I get my nursery bill and it’s usually topped up within 24 hours and then I transfer to the nursery.

I don’t really understand the comment about them paying you only once in 9 months, they’ve always topped my balances up within 24 hours

Right, thank you, @crispsandcheese sandwich. That’s a much better system. My head is so fried at the moment with work, life admin, and my husband’s redundancy it’s like I can’t even do basic maths anymore 🥲 This sounds like a great way to make sure that I can just get to a regular system where I don’t have to change it each month.

PS does this mean that when the 15 hours benefit kicks in they also use the same accounts? Or does it work by the Nursery itself simply reducing their bill at source?

Month 1: you pay in £1,182, get a top up of £295. Pay out £1348 leaving you with £129
Month 2: pay in £1,182, get a top up of £205 (all that's left of the £500), pay out £1,348, leaving you with £168
Month 3: pay in £1,182, which combined with the £168 you have left gets you to £1,350 which makes your final bill

If you pay in £1181.34 per month that will be enough over a 3 month period.

(£1181.34 x 3) + £500 = £4044.02
£4044 / 3 = £1348 per month

It does mean the first 2 months of every 3 there will be a bit left sat in your TFC account, waiting on that 3rd month where you won’t get the full 20% top up.