Changing from childcare vouchers to tax free childcare

[Sunday89]

Hi, currently in the process of changing from childcare vouchers scheme to tax free childcare scheme to pay our nursery fees.
Our fees have gone over £10,000 per year and online calculators suggest the new scheme would save us more than vouchers.
Myself and DH have cancelled our vouchers and I’ve set up the government gateway portal. Does anyone know how much I need to pay into the portal for it to be topped up enough to pay fees of £848 per month?
And if I was to transfer money in, how quickly does it get topped up? Will it be hours or days?
Thank you!

Example:

If you have a childcare bill of £500, pay in £400 !and £100 top up will be added.

Basically government add 20% of total bill, to work it out they add 25% of whatever you put in.

Put a payment in, then view your account and it will show their top up so you can see it.

I find it so easy to use

Oh and its is days not hours, give yourself 4 or 5 working days to get all money in, top ups in and payment made to childcare

I've just applied for this - wish I had done it earlier as DD has been in nursery for 18 months and we could have saved a fortune

lazypuppy thanks so much that’s exactly the info I was after
thechinesechicken yep sickening isn’t it! Mines only been in nursery for 4 months but wish I’d realised from the beginning. I’m telling everyone I know now with massive childcare bills!

Surely it's the same saving as vouchers? Vouchers come out of your pay before tax, so £800 in vouchers is worth £1,000 in reality?

Just do:

Total monthly bill x 0.8

That's how much you need to pay in each month. Once it's cleared, you set up a payment to the provider on your account.

@Kethy

Vouchers are capped at £243 in total for the tax free element.

I can't remember the exact numbers but I currently save ~£600 in tax per year via vouchers whereas tax free childcare will save me ~£2000 - so it's a huge difference!

I love this scheme! I keep telling people about it but they just keep going on about their childcare vouchers

I haf bills. Of £1000 per month but it only cost me £800, so good.

really interested to see how much I’ll be gaining in salary from cancelling the vouchers this month,compared to what I think will be around a £140 per month saving in the new scheme

It's good that you have realised that in your situation you are better off with Tax Free Childcare. With one child it is very dependent on your childcare costs and also as to each parents tax bracket, as to which scheme is better. Also vouchers can be used up to a higher age so something else to factor in, though who knows what schemes will exist in 10, 12, 15 years time.

Tax Free Childcare is great when it works. It takes a while to get used to how the system works, as LazyPuppy says it takes DAYS not HOURS to do things. The system now should show you when you have cleared funds available, so once your incoming money has cleared you get the top-up (max top-up of £500 per child per 3 month period) then you can action payment to your care provider which takes 3-4 working days to occur. With luck later this year that final part will get reduced in time it takes.

If you have childcare bills of around 500-550 a month is it just as well staying with childcare vouchers or changing over? I can't make head or tail of it. The 400 is every month and the 150 is only during ten time so some months is less.

arkos I’d guess vouchers but you can do a calculator online to check, google childcare choices

nannynick thanks, good to know it’s not instant and will take more time to go through than the vouchers did

Arkos, it may depend on if only one parent is in a voucher scheme or both parents and if they are lower or higher rate tax payers.

So hard to say but generally based on your numbers I would expect it is better being on vouchers, if both parents are lower rate tax payers and both claim vouchers, as each parent could be saving £900ish per year.

Calculate your total yearly childcare cost, per child.
Calculate 20% of that yearly childcare cost.
Then calculate what saving you are getting with vouchers - your voucher provider website may help with that.

Yes, there's a calculator to check what you could gain/lose. It will depend on cost of childcare and your income - as a higher tax payer I only got the lower amount of vouchers but pay over £1000 in childcare costs so it's a lot better for me. I hadn't thought of the fact that vouchers are valid later on for eg holiday clubs though...

And don't forget that you can't register for childcare vouchers any more, so if you change jobs you'll have to move onto tax free cc.
We found that one parent can't claim vouchers while one has a tax free childcare account for the same child, so we've both switched now to tax free cc now. I've actually found it quite quick to move money now it's all set up.

remember if you have children that you claim dla for, the amount you can claim for is higher and the age limit is up to 16/18 years.

Also don't forget that the workplace nursery benefit can save you much more so I would investigate that too.

You save tax and ni on the full nursery fee no capped amount.

You're employer just signs up with a scheme supplier, no need for an on-site nursery just the scheme name is misleading.

Also if either parent earns £100,000 or more then Tax-Free Childcare cannot be claimed but Vouchers can.

It is per child as well, unlike vouchers. So we get 3x the savings now.

This is interesting, I recently changed job so can no longer claim vouchers but my husband still is, would it be worth us both leaving the scheme and entering the new scheme? We spend a total of about 550 a month on childcare. I’m guess now that I’m not in a scheme it will be better to change?

Yeah we both claim and both low tax payers.

Vouchers can also be used for extra curricular activity clubs in some cases - and if it's borderline which scheme that's worth considering as well.

The Tax free scheme you can spend it on holiday clubs and after school club if the company is registered for the scheme. I think that goes up to age 11 or 12