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Tax Free Childcare Account - Question!
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Calculus2020 · 19/02/2020 14:13

Asking for a friend who is getting a mortgage soon....if you set up a childcare account that is paid for by a family member and not the parent, will this negatively affect their mortgage application? They don't pay for the nursery childcare so isn't an expense for them. They will inform this to their broker but they weren't sure if the government tax free account will show up on any credit checks? I didn't think so but thought I would ask here!

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PotteringAlong · 19/02/2020 14:15

I don’t know, but (statement of the obvious) it will also show that the money hasn’t originated from their bank account.

I’m also assuming that they can afford both childcare and their mortgage and they are not relying on family paying for ever.

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PotteringAlong · 19/02/2020 14:16

Ie, their tax free childcare account will show that. So they can prove they are not paying it.

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Calculus2020 · 19/02/2020 14:19

I’m also assuming that they can afford both childcare and their mortgage and they are not relying on family paying for ever

Well as the little one will eventually go to school and grow up, no, they won't be 'relying' on it forever Grin haha.

Thank you!

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PotteringAlong · 19/02/2020 14:26

Well no, but if the family member gets sick in 6 months time and can’t pay it, then can they pay it for the foreseeable future? And, although my childcare bill did decrease with the 30 free hours, it then didn’t decrease with them going to school because wrap around care is £17 a day and that’s the same as full time care - 30 hours.

So, whilst they don’t need to be able to pay it forever, they will need to pay until their youngest child is 11 so that’s actually quite a long time.

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Cyberlibre · 20/02/2020 09:35

I don't think they'll be eligible for tax free childcare if it isn't them paying it? The whole point is that the 20% comes out of the parents tax? Correct me if I'm wrong of course.
But it is means tested so how can they test it not on the parents income? I may be being stupid of course.

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Cyberlibre · 20/02/2020 09:35

I don't think they'll be eligible for tax free childcare if it isn't them paying it? The whole point is that the 20% comes out of the parents tax? Correct me if I'm wrong of course.
But it is means tested so how can they test it not on the parents income? I may be being stupid of course.

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PotteringAlong · 20/02/2020 10:31

You just have an account - anyone can pay into it.

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RAINSh0wers · 20/02/2020 10:34

That new tax free accounts allow anyone to pay into them. We’re really fortunate and my in-laws pay into ours which really takes some of the pressure off.

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QforCucumber · 20/02/2020 10:38

The account doesnt show on a Credit check, the only time we were questioned is relating to the bank statements and the amount which was transferred out as it showed as HMRC TFC on the statement and the lender asked what that was - we had already declared our childcare costs and so they were happy when we said that's what it was for.

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Calculus2020 · 20/02/2020 17:25

Thank you everyone - will pass info on!

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