Tax Credits & 3yr old funding at private nursery

[pancakeboobies]

Hello, was just wondering if anyone might know what will happen to my tax credits come September.
My son becomes funded then and his (private) nursery allow the funding to be used year round as one day "free". I was wondering then, whether this means my tax credits will go down as I will be paying less in childcare or if it might be disregarded as if I chose to take the funding elsewhere on the days I don't work, I would have still had to pay what I always have at the nursery (hope that makes sense? Thanks in advance

It will be whichever of these you decide to do! So if you drop the number of hours you pay for, your tax credits will drop (however, you will still be better off as tax credits are only paying a max of 70% of the childcare costs). If you use the 15 hours free on top of the current childcare, your tax credits will stay the same.

that's great rockchick, thanks! Was thinking I might have more money in Sept but doesn't look like it'll make much difference then sadly!

You should be slightly better off, as the less childcare you have to pay for, the less you are topping up on top of the amount tax credits give you. At the moment, if you pay for £200 of childcare, you get £140 (max) of that from tax credits, so it is costing you £60. If your childcare bill drops to £100, tax credits will pay £70, so you are only paying £30 out yourself instead of £60. Does that make sense?