Tax-Free Childcare stopped after tax return. Are we over £100k?

[Beyondthegalaxies]

I believe my partner's 2024 - 2025 tax return that we only submitted at the start of the year, has triggered something with our tax-free childcare accounts, and I've been messaged to say the payments have been stopped because:

"BASED ON THE INFORMATION WE HAVE AVAILABLE TO US WE HAVE DECIDED YOUR PARTNER'S INCOME IS LIKELY TO EXCEED £100,000 IN THIS TAX YEAR." (copy and pasted the CAPS text sent to me!)

He has been fortunate to receive two generous pay increases and bonuses in the space of 12 months, but none of this has pushed him over the threshold as far as I can tell, unless the total of both his bonuses is added to the third and final salary figure that was increased in January 2026. In which case he's over by £24.65. Is that how they calculate it?

I can write a case as to why we think this decision is wrong, which is pointless if we're in fact over the threshold.

We were planning to take out a SIPP in the near future to keep us under the £100k limit, but we didn't think it was necessary for this tax year.

Don't forget that it's not salary + bonus but adjusted net income. Is there any savings interest that would need to be added? Any gift aid? If it's just a small amount over then you could make a charity donation and back date it to last year. Really worth working out if you are close to the £100k.

Minimal savings interest. Like £70, but I didn't realise that was added on. How would that work if that income was in a joint account - would it be £35 added to his adjusted net income?

I'm still curious to know the answer to my original question - would the salary increase my partner received in January 2026 be used as the final figure in the calculation for that tax year alongside the two bonuses?

They are calculating it for the year ahead so yes you will be over now they are seeing if you are eligible. They are saying based in his new salary, he will be over for 26/27 and therefore not eligible.

Its not an exact science its a best estimate.

The current tax year is 2027 - the year ending early april 2027.

HMRC will usually estimate based on prior year until they have more up to date info.

So if your DH last pay rise was jan 2026, they'll be assuming that is his salary for the whole tax year 2027. Then if he usually gets bonuses on top, they may be assuming he will get similar this year.

Your best bet is to go on hmrc and use government gateway to access DH personal tax account. Add up what you think he'll actually earn, plus bonuses. Then take off any pension contributions. And enter what's left as your estimate of his taxable income.

If its over 100k its well worth his sacrificing bonuses into pension.

Look at salary over a tax year not salary on paper. HMRC sometimes seem to assume that a bonus month is a massive pay rise will be repeated every month and so vastly overestimate actual annual salary.

If the problem is this current tax year then project forward total expected taxable pay. Add on savings interest and take off gift aid if applicable. Any excess over the £100k, bonus, pay rise all to go into pension. He may be able to do AVC to workplace scheme.

Thank you @Shatenoeuf

A similar bonus scheme for current tax year is highly unlikely. Last year DH was given a retention bonus instead of a pay rise and then unexpectedly given a meaningful pay rise a few months later. Come to think of it, if I work income out based on payslips for that year, his employee did not pay him more than £100k.

I think we are ok then. I just need to state our position to hmrc eloquently enough so that it makes sense to them.

https://www.gov.uk/guidance/adjusted-net-income

Check estimated earnings in his personal tax account.
If this is over £100K and you genuinely believe he will earn less, amend it.

Thanks @Marmight. I didn't know we could amend our personal tax account this way until @Shatenoeuf mentioned it.

How do you stay on top of tax affairs and changes to the system? Do you keep an eye on particular financial sources/ news sites, like Money Saving Expert, HMRC direct, or do you have a personal advisor?