100k threshold for free childcare

[Bananasinpyjamas1988]

Hi, I wondered if anyone can help…

I earn just on the threshold of 100k so have been overpaying into my pension if I go over so as not to lose tax free childcare or free nursery hours.

my child will be going to school in September. When do I need to stop watching the threshold? If I go over 100k in the next tax year will they recoup the cost of the 30 free hours etc?

thanks so much, these things make my head hurt

Not 100% sure; if I were you I'd keep up the extra pension contributions so that you're averaging below 100k to April 2025, and then drop the extra pension if you'd rather have the money.
I can't imagine them recouping it, but you never know. I pay stupid amounts just to avoid ever falling foul of some rule I don't know

When I've enquired they've essentially said as soon as there is a change in your circumstances e.g. you now know you are going to go over the threshold you need to stop claiming immediately. So yes, in theory you can continue to keep yourself under the threshold until you no longer need the service.

HMRC says that it relates to the current tax year so I would say that you need to keep 24/25 earnings under 100k adjusted

I agree with this. Keep paying extra I to your pension pot until your DC starts school. It's not a year behind like self assessment.

Thanks everyone

Hi @Bananasinpyjamas1988 I hope you don’t me jumping on your thread! I had a question around the pension contributions as I’ll also be slightly over 100k and we’re expecting our first baby now..
Does it count if you over-pay into your existing work pension, or does it need to be a separate private pension that you take out for it to be deducted from your income and to qualify for the free childcare? Thanks!

Wouldn’t risk it keep as you are till your in a fresh tax year

Yes any employee pension contributions will count!

@TheOneWithUnagi great thanks for your advice! That makes life easier.

Sorry I have another niche question in case either of you know the answer @TheOneWithUnagi @Bananasinpyjamas1988 …if you have shared (RSUs) as part of your package, would these count in the year that you are awarded them or the year that they vest?

I don’t have any shared currently but should get an award in FY24/25 if our company performance is good but they wouldn’t vest for 3 years so was thinking these wouldn’t count towards my income for the upcoming tax year…is that right?

• shares, not shared! (autocorrect!)

Probably vesting (depends on exact terms) but to be sure ask your employer when they would be taxed via payroll.

Thanks @DaisyHaites I appreciate your advice and I’ll definitely check with work just to be sure.

I get RSUs and they are only taxed when they vest

@TheOneWithUnagi great, thanks again for your advice!

Just popping in to say hello and thank you as I am in a similar position so this is very helpful info!