Gov Tax-Free childcare topup - higher salary question

[StationeryNerd]

Hello, does anyone know if the eligibility for the Gov top-up on childcare is based on your salary once pension contributions are taken out?
My DH has a new job offer. The starting salary is £110k gross. But he can put so much into a pension or salary sacrifice meaning that he will go under the Government £100k limit. His take home will be £90k: does this mean we can still claim the top-up? Thanks

Sorry @MidnightPatrol I neglected to mention that we did sign up a few months ago, then I randomly got my payments stopped this month. They said it was because they didn't know if my husband was in work (he is, always has been, I reconfirmed this). Given that coincidentally, he's about to start a new role next month, I need to prove to them that yes, he's still working. But he obvs won't have a payslip yet. Sorry if this makes no sense. I just get these Secure Messages from them that have scant information, and then there's never a way to get through on the helpline.

As @happy2025 said. if he has not yet started work, earnings will be under threshold for this tax year so you would be accepted (on the basis you are both working and meet the minimum threshold).

You need to tick the box that he is remaining below every 3 months so for next tax year, he needs to ensure enough is diverted into his pension to keep his salary under threshold. If they are unsure whether it will, they will call you to confirm your circumstances - they will accept it on your word if you say you are putting the extra into pension and continue passing on the benefit. Of course checks are done on the other end so make sure you keep to your word

(Yes please don't derail my question, if you're unhappy or jealous, take it to your MP. Not me. You are confusing a practical economic question with personal feelings. The economy is stagnant: women need to be back in work. And gaining growth from the aspirational class is how economies grow. So people like my DH who earns a decent but average London salary is the type of person the country needs to stimulate growth to benefit all of us. Thirdly, when you live in London and mortgage is £2.5k per month and nursery for just one child is £1400 then you've got to stop thinking of £100k salary as astronomical. It buys you a moderate, nice, middle class life but not a luxury life (inflation, economics, can't be bothered to go into it more). Fourth, it doesn't stop a childcare place or take from anyone else - I don't think you've understood what the scheme is at all. Fifth,you also haven't accounted for situations like mine where the second parent doesn't earn much at all. Go take your anger out on millionaires, billionaires, the rentier class, people who have second and third homes, etc etc. Stop the in-fighting. This was a simple, practical post but feel free to start a separate thread on the 'moral' argument as you call it)

ANYWAY Thank you for answering with simple, practical facts @happy2025 @AKettleOfDifferentFish @Tisthedamnseason @Acc0untant et al x Signing off now.

Sorry I'm with @DragonFly98

The funded hours mean childcare providers run at a loss. I don't give a monkeys about most benefits / tax efficiency as MPs and Lords rinse the public purse for much more.

With this issue the only people who are getting ripped off with childcare hours are childminders and nurseries. There is also the issue that most settings can't afford many funded places (if any) so by using one you are taking a place away from a family who may really need it.

Sorry if repeating haven't RTFT

The thread is not about funded hours but about tax-free childcare accounts. The salary thresholds are £100k for both but they are two separate things. So no, people like OP are not taking anything away from anything (and if anything ate subsidizing free hours for others, but that's a topic for another thread).

I have an additional question, for anyone willing and able to answer! If someone isn't certain whether they'll go over the £100k threshold or not - say their salary minus pension is definitely below £100k but they might receive a bonus in the last month of the tax year that would take them over the threshold - what should they do? Is it okay for them to wait until they know their bonus amount (if any) and therefore whether they will actually go over?

I don't know the exact answer to your question but HMRC have a forum that may be useful:
https://community.hmrc.gov.uk/customerforums/

Yes, and usually employers will have the option of putting 100% of your bonus (or a percentage) straight into your pension. We do this as never sure exactly how much the bonus will be and put it all in our pensions so we don’t have to worry about going over.

Just to add to the previous PP, the time you receive the bonus is the point at which you are over the threshold and need to stop claiming (when you do your 3 month re-confirmation). IME they don't claim back anything they have already given you that tax year but you are no longer eligible.

The problem comes if your child is younger and you want to claim again the next tax year - it is a massive pain to set it all up again so I would second the PP advice to put whole bonus in pension unless your child is due to start school

Thank you!

Or maybe just think that someone who earns 99k after paying into their pension still pays 27k of tax, so maybe don’t begrudge them the small amount they are clawing back from tax free childcare.

I agree it should be based on household income being 100k or above.

So when you are able to claim a benefit such as tax free childcare by reducing your earned income on paper, that is called “arranging your tax affairs to access support” which is a positive thing.
If a single mum reduces her working hours to claim more UC because she is struggling for varies reasons that’s taking tax payers money.
Remind me again where the money for tax free childcare comes from?

I can help you here.

Person 1 is using a perfectly legitimate way of investing the money that they personally have earned in the course of their employment. It’s effective tax planning.

The other is maximising the amount they can take out of the system, to work less while those that are working pay for it. Also perfectly legitimate but if I was a full time employee, earning 102k and paying an extra 3k into my pension so I don’t lose my access to tax free childcare, while paying 27k tax I would be totally fucked off if someone doing 16 hours a week claiming universal credit and housing benefit and whatever else was trying to reduce the amount they worked, and claim more, tried to make out that me using the money I had personally earned in a way that benefits myself was morally wrong.

Remind me again where the money for tax free childcare comes from?

Well it doesn't come from single parents who work less than 16 hours a week 🙄

😂

The money for tax free childcare is coming from people paying lots of tax, not from the person working 16 hours a week in a minimum wage job.

I have no issue providing state support for those who need it, I do take issue however with paying vast sums of tax and being excluded from the benefits - particularly in the case of childcare, where the cost is incredibly high and the loss of childcare subsidies amounts to a very significant amount of tax.

It’s an insane piece of policy from the government, to incentivise high earners to do this. They don’t want to do this, but would you work for free for three months of the year? I imagine not - so why should others?

See that’s what’s wrong the hindsight that paying taxes is working for free. Dh is paying almost half of a portion of his salary in tax. He isn’t working for free he is paying into the system and his taxes are no better than a lower earners. It’s a privilege to have the opportunities in life that put you in the position to be in a high tax bracket.
I have derailed the thread so I won’t post anymore, I only intended to post once but got caught up in replying to people.

I pay 100% of part of my income in tax. 100%.

If you have two children at nursery, you will pay 100% tax on anything between £100-135k. Earn less? The rate goes above 100%. That is working for free.

In what way is this ‘a privilege’? Is it really any surprise people will find ways to not pay this 100% effective rate?

Not a 50% rate, a 100% rate. This is not fairness.

One person earning 125k with nursery age children has the same net income as 2 parents each earning 38k each also with nursery age children. How is it right that the household earning 50k more is not a penny better off than the lower earning household?