Childcare vouchers and tax credits.

[MacTaylorsSecretWife]

I'm hoping for some advice regarding tax credits and childcare vouchers.

At the moment we claim childcare vouchers through my employer as we didn't qualify for any tax credit help with one child. I am on maternity leave with dc2 at the moment and due to go back to work shortly. While I have been off I have continued to claim the vouchers. Now with 2 children we do qualify for some help towards childcare through tax credits so I understand that we will be better doing that than continuing with the vouchers.

Now my query is do we have to use all the stock piled vouchers in my account before we can claim the tax credits or is it just that I can't claim simultaneously for both?

You just can't claim for both. Although you can actually claim for both if you have child care costs above the tax credit limit.

If you costs are above £300 you can claim for the extra amount so if your costs were £400 a week you would receive £220 in tax credits to cover the first £300 of costs. You can then claim/use childcare vouchers for the remaining £100.

When I say you would receive £220 I meant up to £220 depending on your income. Regardless if the amount of tax credits actual received you can't use/ claim vouchers for any costs under £300.

Costs will definitely be under £300 a week. So all I need to do is cancel my salary sacrifice and make a claim for tax credits when I return to work and not worry about what I have in my childcare voucher account. Sounds simple enough.

Thank you.

HMRC have a calculator as it depends on loads of factors. What you get in childcare vouchers reduces what you can claim for in tax credit support.

www.hmrc.gov.uk/calcs/ccin.htm

I've used that calculator and we are definitely better off using tax credits and not vouchers. I just needed to know if I had yo use up all the vouchers I had before I claimed for tax credits. Thank you though.

Oh sorry. No you don't. You can use them whenever. You have already had the benefit of the tax exemption.

Great thank you.