What happens to childcare element of WTC when pre-school funding comes in

[bubblensqueak]

Hi, I work for myself for 16+ hours a week. My DS (3) has two full days at nursery at the moment. I receive some of the cost of those two days through the Childcare Element of the Working Tax Credit.

Nursery costs about £55 a day, so about £110 a week for my two days. I get about £63 towards that as CE of WTC (straight into my bank account).

DS is eligible for funding from January. Because nursery is posh (longer hours, french and phonics lessons blah blah) the funding only covers a portion of the fees. It works out about the same I think, that I need to pay an additional £40 a week or so.

Several people have told me (including the nursery manager) that I will continue to receive the same amount of childcare element (£63) as I was receiving before.

Seems crazy to me, as I'd take the £63 each week, pay off the £40 to top up the nursery cost, and end up with £23 in profit.

Same nursery manager advised me not to mention it to HMRC, and just keep receiving the money. Obvs I don't want them to catch up with me a bit later and my end up paying money back.

SOooOoOooOoo... can anyone tell me what happens now?

Much love

BnS

As a rule of thumb 'not mentioning things to HMRC' and hoping for the best can come back to bite you. If you're paying £40/week for childcare rather than £110/week then that should be what you declare. If you want to see what the difference is, run the new numbers through the benefits checker at www.turn2us.org.uk

Your 15 hours must be completely free of charge. The nursery are not allowed to charge top ups if the funding from the government does not cover their costs. In practise, many nurseries do,but it is against the fraudulent and against the terms of their agreement with the local authority.

Thanks both. Thanks for the the link, Cogito. Yup, pretty much what I'll do.

Littlefish, I think it's because they open from 8 to 6 and you have to pay for the full day, so it's 20 hours for 2 days. So you pay that extra time, then you pay for the extra tutors that they bring in for phonics and French, that you can't opt out of.

It's fine to pay for the extra 5 hours, but you should not be charged anything above that, or you should be able to opt out of the additional charges. Speak to your local authority early years department and they will be able to advise you further.

It's not really confusing, you just tell the tax credits your new costs are £40 a week. To do anything else would be fraud.