Tax free child care

[kate288]

My little one is starting nursery soon and I've been looking at the tax free childcare. I was wondering how it works in terms of the government paying the 20%. Do they pay it quarterly for example or is it every month? Just trying to work out how much I need to put in the account, whether it's the full amount for the first month and then the government reimburse the account later or if they put the 20% in straight away. Thanks 😊

It’s put in straight away - as soon as you top up your account the government amount is added on.

Yep they add 20% up to a certain amount about a day after depositing. So you should only need to add 80% of what the month costs.

That's perfect thank you!

If you pay in £80, they add £20 (25% of what you paid in. 20% of the total).
Your payment in needs a bit of time to clear and have the topup added. Once the account shows the funds are cleared then you push a button to pay your childcare provider. The payment to provider will now usually happen next working day if you pushed the button in the morning, on a working day.

There is a maximum topup for each 3 month period from when you open the account. For one child the max is £500. So each 3 month period you can pay in £2000 and have £500 added, per child.

If you end up paying in more to your online account than you need (we did initially, also not knowing when the government portion would be added), you are also able to withdraw it anytime back into your own bank account.