HELLLLLLPPPPPP!!Tax Credits,Nursery Grant all very confusing

[CHOCOLATEPEANUT]

I am reluctantly going back to full time as we are moving to a better house/area.

My dd turned 3 last Nov and her nursery told me she will get the nursery grant.They are working it out for me and knocking off the bill. I get some tax credits now but when my salary goes up i will get less or even none.

My dh said we would be better off claiming for nursery fees through our employers on the tax savings scheme but Im not sure??

Will we get tax credits for a total income of 45k?

Does anyone have any experience of this? We just had a huge row as I said we are ok as we are and he thinks we could save cash!!

Don't know about tax credits but here is the info - it looks like you would get them

childtaxcredits

Claiming childcare vouchers from your employers is also worth doing as you will reduce your tax/NI bill

I think you can do both

Hi CP,
You will get tax credits up to a joint income of about £60K. Can't help you re nursery costs, claims etc though will be watching the replies as I go back in June and have the same questions.

You will also get working tax credit!!

Hi Chocolatepeanut. I think i'm right in saying that you either get tax credits or nursery vouchers but not both. if one of you is paying 40% tax, then you can get nursery vouchers - need to see employer about that one. hope that helps.

there are lots of things being mentioned here.....

1. there are child tax credits, working tax credits, and a childcare element of tax credits -you will be getting the bare minumum on an income of £45k, it'll be about £550 a year. you won't get the childcare element, that's for low income families.

1. the employer scheme, like a salary sacrifice, is basically up to £55 a week in nursery vouchers in place of £55 of your (and or your dh's) salary. you gain more than £55 though as you don't pay tax or NI on it. so if you were paying 40% tax you'd gain more, but if you pay basic rate tax then you still gain, just not as much. check with both your employers if they offer this. it isn't just for higher rate tax payers, but not all employers offer it. the employers who offer this also usually offer a similar set up for health care and dentistry etc.

1. the government offers 'free' nursery places for children aged 3 and over. this is 5 lots of 2.5 hour sessions a week. if it's a council nursery it basically means yes, child goes to nursery up to 5 times a week for free. if it's a private nursery where fees are variable, the nursery deducts the 'free' place subsidy they get from the government and charge you the difference. at a private nursery you can add the 'free' sessions together, to get 2 longer sessions for example.

does that make sense??! so there are 3 things. tax credits, employer salary sacrifice schemes AND government 'free' nursery places.

Agree with dizzy - on £45k a year joint you'd only get the basic £550ish in tax credits. But you would get the nursery grant (either 5 x 2.5 hours free per week, or a reduction in fees - about £1500/year I think although now ds is at school I don't knwo exact values any more) PLUS both parents you can get £55/week in childcare vouchers which are free of tax and NI if your employers do them.

If your employers don't already do the vouchers it's worth suggesting it to them, as they save employers NI too, so it benefits them as well.