New childcare tax free scheme

[Limpetsmum]

Am I right in thinking come autumn I'm going to save a fortune in Childcare. Currently have a nanny for three kids (4 days a week) + one day nursery.
I pay £2000 per child nursery x2 = £4000 (one child gets free 15 hours) +
Nanny = £20,000/year for four days a week.
Total = 24000

Does that mean I'll get £4800 (20% of 24000) from government?

Currently all I get is about £900/year from Childcare voucher scheme. It seems too good to be true.

Just want to check that scheme covers nanny pay and not just for nurseries.

Watching with interest.

Gallic, the link I shared earlier goes into significant detail about how childcare accounts will operate. Utterly no suggestion of quarterly/in arrears.

Honestly, it's quite a detailed and informative document about post-consultation operational and policy decisions.

You work hard and you make your choice to have more kids than you can seemingly afford to pay childcare for.

Er… she can afford it. she is affording it. There is a way for all working parents to get help. So what is your problem honeypot?

Currently DH gets childcare vouchers. I get nothing because I'm self employed - but I have just registered my own company and as of April I will be able to get childcare vouchers through that company.

Is there an easy way to work out if we're better off staying with childcare vouchers or moving to the new scheme?

We then have the added complication of another DC arriving in September who will be going to nursery from next Jan, so I'll need to work out whether to ditch the vouchers for the new scheme then too.

GooRoo - I'm in the same situation as you - DH gets vouchers though work, I'm self-employed and get nothing. What's this change about registering one's own company?
Thanks!

On advice from my accountant, I've registered a company and will pay myself through PAYE and dividends from the next tax year onwards. There are lots of advantages, including childcare vouchers and reduced NI payments, but only if you earn over a certain amount so if you are self employed it's worth discussing with your accountant. The disadvantages include increased accountancy costs and extra admin and responsibilities - so it's not for everyone.

If you are self employed and not planning to become a registered company you are almost certainly better off by taking up the new childcare payment scheme in the autumn.

limpet

You are having your lifestyle choice supported by benefits paid for by other tax payers and that is fine because I am doing exactly the same through tax credits as are many others.
As long as you see it for what it is that is fine.
The reason why your choice might not be popular is because welfare has been cut dramatically to those who NEED it not choose to take it.
It is your choice to work, maybe its not even a necessity and you could manage on one income.
Tax credits are to be replaced by UC which does not include entitlement for couples with a sahm which up until now has been a choice for more than will be possible under the new scheme. Myself included here.
Now, I'm not bothered tbh as would like to think what they take from us would go towards supporting the disabled, ill, those who can't work.
However, they are going to go to some very rich people to support their lifestyle choice. You can't see how those who NEED the benefit might be peeved, really?

This site has done some work on what level of childcare costs you'd need to be paying before TFC becomes a better deal.

Thanks Jassy

hmmm odd argument but then I may think that as between us as a couple we only earn £60k, that's both of us working full time. can only dream of figures over £150k

no choice not to go back to work as mortgage and bills need to be paid for, therefore i wholeheartedly welcome this scheme. my employer does not provide childcare vouchers and dp is a self employed contractor so cannot get them, why should i lose out just because my company doesn't provide something which the next persons might? at least this way everyone is made the same instead of it being the decision of the company you work for.

Limpet, I owe you an apology. You're right, I have a problem & your individual post has sparked a pre-election House of Cards style blatant-politicising fire beneath my too-inpatient-to-post-in-depth rationale.

I reread our messages & you were only asking for confirmation of understanding the proposal, not anything else. I was rude and I'm sorry.

You are not the problem, and using money paid by our taxes decided by our government is not wrong. But a society whereby hard working individuals (regardless of income) need to have subsidies to afford to work due to the cost of childcare, IMO is wrong.

And whereby you & yours may contribute more than you take I see taxes as a limited pot & potentially our NHS, those beneath the poverty line and our education system may benefit more from said pot than those in your situation who would like more disposable income, but are surviving on the current system.

But I don't have any other answers either. Means testing is complex and expensive so finding a one-size-fits all (to get you elected) is always going to be tricky.

Hope that's cleared the air & apologies again if I caused offence. I'm going to avoid Underwood & Co for a while & get off my soap box!

And whereby you & yours may contribute more than you take I see taxes as a limited pot & potentially our NHS, those beneath the poverty line and our education system may benefit more from said pot than those in your situation who would like more disposable income, but are surviving on the current system.

This, is my argument too.
It is nothing personal OP, not your fault and who can blame you.
But please see how some people would be mighty pissed off, especially those who have no choice in being on very low benefits and seeing them cut.

Everyone's opinion of needs and wants are different. Similarly everyone's views of 'entitlements' are different.

Don't presume people earning over £100k are rich - why would we be working extra hours if we were?!? We just have a hard working work ethic and try to better ourselves and our family. Not rely on others.
I am very grateful for the tax relief on childcare but see it very differently to tax credits. I am not asking for others money, just getting tax relief on my own money that I earn.

I do not presume those earning more are rich.
however, if you are implying that because my partner and i don't earn a similar amount then we do not have a 'hard working work ethic and try to better ourselves and our family. Not rely on others' then you are deeply mistaken.

Jassy, I'll have another look at your link but I had a good dig around the documents on the gov.uk website a while ago and they were definitely saying the scheme would be administered by NS&I and eligibility assessed quarterly. As I said, it is mere speculation on my part that money would be paid into the account in arrears, partly because all government benefits and credits are paid in arrears.

I wouldn't be using 2 schemes; I would be using one scheme for one child and my partner would be using the other scheme for the other child. This may not be the government's intention but I have yet to see anything which specifically prevents it unless there will be a declaration on the application form

Honeypot that's really refreshing to read your last post and thank you.

I'm not going to get into a political debate about taxes etc.
but do remember, you have to reward those who work hard because some others don't. If there's no financial incentive to better yourself there won't be drive for the 'rich' to help prop up society. If I gave up work, the government would lose £20k of my money that I pay in tax. Not to mention the £20k I spend to employ someone and give them a job. So for me to receive £4500 to encourage me to stay in work can only be a good thing for all surely. And yes i'm hard working but I miss my kids and I want to see them more. So if this makes my work life balance better so I don't have to work more than 50 hours/week so I can continue paying £20k in tax and continue to employ someone, so be it.
It's easy to vindicate the 'rich' and to presume the rich have an easy life. The harsh reality is that, that we work really hard for what we have. We don't expect anything or feel we are entitled to anything. We pay for what we can afford and work hard. Simple.

Just seen that eligibility would cease if one parent wasn't working (other than for caring or disability reasons). So if one parent loses their job and is therefore home to look after children, you have to break your contract with childcare provider if you can't afford the fees and hope there will still be a place available when the other parent returns to work.
Not sure about situations where one parent works and the other is a student.

As usual, poorly thought out policy left to the last minute to iron out the details.

Limpet you attitude is appalling and ignorant. Do you think people earning the minimum wage don't have a hard working ethic and want to do the best for their families.
And you will be claiming a benefit just the same as tax credit. You don't get any money for childcare via tax credits unless you are working.

Just read you last post op, you couldn't be more entitled!

Do you think people earning the minimum wage don't have a hard working ethic and want to do the best for their families.

I dont think anybody has said that in this thread soontobesix.

And i do think that having parents that can afford to work benefits the economy and society.

I agree you have to reward those who work hard - and our joint 60k a year income comes in at both dp and i working 45 hours a week each. but because we do not earn as you do we do not work hard is that correct??

in both of our employs there is a financial incentive to better ourselves, but it wont be happening overnight. at 28 years old i am aware I am nowhere near my full potential in my role, does this mean i shouldn't benefit from paying for tax free childcare??

soontobesix i'm glad you have read this as i have as I thought i was losing it a little there by being angered by it!

and nolim this statement from the OP ''Don't presume people earning over £100k are rich - why would we be working extra hours if we were?!? We just have a hard working work ethic and try to better ourselves and our family. Not rely on others. ''

is what implies that people not in that earning potential are not of the working ethic

Er … that is not how i interpret it.

Saying "i make x money and have a hard working ethic" does not mean "those who dont make x money are not hard working".

I never once said that those who don't earn lots aren't hard working, have a good work ethic or strive to better their families.
But don't presume the rich aren't hard working either. We earn the money we do because we work and have worked hard throughout our lives. Not because we sit back and watch the money roll in.
As far as I understand it, everyone in work with both partners working are entitled to this tax relief. What's your problem? You're getting the same tax relief - don't have a go at me, just because I earn more than you. Seems pretty childish.

a definite different take on the same sentence I believe then.

when the above highlighted is put into a context alongside ''but do remember, you have to reward those who work hard because some others don't. If there's no financial incentive to better yourself there won't be drive for the 'rich' to help prop up society''

and

'presume the rich have an easy life. The harsh reality is that, that we work really hard for what we have. We don't expect anything or feel we are entitled to anything'

to me the implications are clear. that those of us who don't have such an earning potential therefore do apparently feel entitles to help and don't work hard. tax credits are not something dp or I would be eligible for. when we have our dc i will be back at work after 6 months. I work hard for everything I have too and do not appreciate the implications that I do not.