Old v New Childcare Vouchers scheme

[BoyMeetsWorld]

Can anyone help me understand, Please...

Potentially been offered a new job, but if I take it I'd have to come off the 'old' EdenRed childcare vouchers scheme that I've been on many years and no longer exists, onto the new one.

From what I've understood, you have to pay all your childcare yourself upfront all year, keep all the receipts then claim it back at the end of the year. Is that really right? If so, that's a nightmare vs my current scheme where I get vouchers as we go so we're never out of pocket. The first year on a new scheme would hit us a lot until could claim back.

Also the calculator looks like I'd be £800 worse off on the new scheme, despite no increase in salary...

I don't know what scheme yoj are talking about.

I use the tax-free childcare now so save 20% on each months payment

From what I've understood, you have to pay all your childcare yourself upfront all year, keep all the receipts then claim it back at the end of the year. Is that really right?
That does not sound right. Which scheme are you referring to? Tax-Free Childcare is the scheme that most people will now be using (subject to both parents being in work and both earning under £100,000 each).

You can be worse off under Tax-Free Childcare, that is possible. It depends on your individual circumstances.

How old are your children?
How much roughly is your annual childcare cost, per child?
Are there two parent who are both working, earning at least NMW and less than £100,000 each?

Tax free childcare has replaced Childcare vouchers and is nothing like what you've described.

I've done both but definitely save more under the new system than I did with vouchers and it's a lot easier for us too

I was made redundant from my old job (where I got vouchers) so am now in the tax free childcare scheme. I set up an account, pay in money which then gets topped up by 20% and I send it onto my childminder/after school club. It’s pretty straightforward, just takes a few days for the top up and then to appear in the childminders account so I have to allow for that.

With tax free childcare, you pay £8 into an account, the government put in £2 and then you release £10 to your childcare provider each month.

The new system is so easy... register online... pay your money in about a week before the bill is due (time to clear). Every £8 in government puts £2 in to top to £10.
And boom sorted!!

If you haven't already, check out the money saving expert website as it's got loads of info about the two schemes

Sounds like you’re thinking of UC which is payment in arrears.

so rather than the deduction that used to come out for the old vouchers scheme, I'd essentially deduct it myself into the special account...then the government top it up and it transfers directly from there. Is that right?

At the moment, we just send our vouchers directly to the childcare place and any remaining difference we transfer direct from our bank account.

Yes, both working and earning under 100k each, kids on approx £300 each per month...considerably more in holidays.

So I transfer say £80 into my childcare account it then reads £100 (shows govt paid £20 in).
You will add your childcare provider when opening the account.

You then click the pay provider account and within 2/3 days it clears into their account

So it’s simpler as you would never need to transfer any extra across as you can send it all from one place

There is a pretty good calculator on the gov.co.uk website that tells you which scheme works out best for you.

We use the new scheme, it's worked out very well for us, it's quite straightforward once you've set it up.

You get paid your salary without the sacrifice deduction.

You have a tfc account set up via hmrc website. Within that each kid has a subsection.

You pay however much you want to into it for each child separately (via bank card or bank transfer).

It automatically appears in that account as 20% more.

You send payment to provider. It can be one off or regular payments.

Once it's up and running it's fine. Setting up is a bit of a pain though.

Instead of your employer doing a salary sacrifice scheme, your salary is taxed in full, so your take home pay will be different. Use a PAYE calculator to see what your take home pay might be using the gross pay figure on your payslip.

From your take home, sitting in your bank account, you pay money in to your Tax-Free Childcare account (which is on a per-child basis). In every three month period from when you create the account, you can pay in up to £2000 per child and get up to £500 topup per child.
So if each child's childcare cost was £300 and you had three children, you could pay in £240 per child and get £60 top up per child (so total of £720 in split to three child accounts). Then once payments have cleared (this can take a few days) you can pay out to each registered childcare provider (payment to provider takes around 3 working days).

I don't think it would be anything to do with edenred (I get childcare vouchers through them too). It's a completely different thing. You essentially have an account and pay in say £80 into it and the government pay in £20 (20%) but it's capped, can't remember how much. You're probably slightly better off with vouchers (we are), but not massively so. There are comparison tables online where you input your salaries etc and tells you if you're better off with vouchers or the newer tax free (for some of it, not all!) childcare thing.

Thanks all, especially @nannynick really helpful. So is there no element of having to declare anything at end of year? I'd heard there was...

You reconfirm eligibility every three months.

So is there no element of having to declare anything at end of year? I'd heard there was...

That sounds like child benefit. Depending on your earnings, you might need to do a tax return and pay some of it back:

www.gov.uk/child-benefit-tax-charge

Oh I need this info thank you!