Tax Free Childcare Account

[LatteLover12]

I've just seen some information on the ML MSE website about the govt 'topping up' payments into a childcare account by 20%

This has apparently replaced the old childcare voucher scheme.

Does anyone use this? Is it worth it?

Currently 7 months pregnant so no urgent need for childcare yet but I'd like to find out more.

Yes I use it you get 20% off your child care provided you earn under a certain limit and your provider accepts it. Very easy to use. Not sure why anyone wouldn’t use it.

Yes we use it for both nursery and breakfast/after school clubs.
It doesn’t save as much as the old vouchers but it’s still a decent amount. There are a few rules around who can and can’t get it but you can start topping it up from 2 months before you return to work.
If you put in £8 the government top it up to £10 overnight.

Yes I've used it for over a year - kicked myself as didn't set up straight away!
Very easy to use. You have to reconfirm your details every three months but it prompts you to do this and you just click yes if nothing has changed.
Very simple to change details too

They have also recently added the bank transfer option so money can be in the account within 2 hours rather than waiting a day or so

Well, if you plan to use childcare, why wouldn't it be worth it? We have a tax free childcare account and both work full time. Our nursery fees are £1200 a month and the government tops up our contributions by what amounts to £500 per quarter, so reduces our monthly bill by an average of £165. Unfortunately we won't qualify for much longer due to DH getting a promotion, but until that point it's free money. If you're a higher earner then I think the benefit is worth slightly more than childcare vouchers under the old system

Absolutely worth it, saves 20% of your childcare bills. Not sure why anyone wouldn't use it!

This is great! I had no idea it existed. Thank you for the info.

Is it something all the banks have their own version of or something you just set up online?

You set it up on the HMRC website and pay your childminder directly. I put on the same amount every month of what I would spend without the top up then keep the top up sitting there ready to help with the increased expense of the school holidays!

You can only do it through HMRC. It has saved us so much money. And when your little one reaches 3, you may also be eligible for free hours. That dropped our bill from 1000 per month to 762. Then, with tax free childcare, we actually only pay 610!

OMG, honestly, this has made my night!

Thanks so much 😀

As a childcare provider it is something I accept. I was involved with some of the design of the system, like any Government system it is not prefect but it has been around a few years now and is working well, least in my view.
Both parents (unless a single parent) have to be working and neither can earn £100k or more. So it should apply to a lot more parents than the old voucher scheme did which relied on employers providing it.

You sign up on hmrc website.

If your childcare bill is going to be £1000, you pay £800 into the hmrc account.

A day or so later your balance will show as £1000

You then go on to hmrc website and send it to your childminder/ nursery

You can set it up to pay same amount regularly but our bill changes every month so we do it ad hoc