Tax-free childcare (how does it work)

[howdoesitworkanyeay]

Hello all, pls I need help as I do not understand how this works.

My new job says "enables eligible working families to claim 20% of their childcare costs (up to £2.000 per child, per year)

Working 2 jobs 9-5 Mon- Fri
and then
6-11pm some weekdays & some weekends

How does this tax free childcare work?
I pay for it in full and then get refunded by the government?

It seems I will need someone to take them & pick up kids from sch and drop them home (we live far from Sch. & I don't drive for medical reasons) I know it will have to be a registered provider.

I don’t know what help would be available re pick ups and drop offs. There is nothing like that near here.

Tax free childcare- you set up a special account and then pay the money into that. The government add their money and then from that account you pay the nursery. Eg you pay in £80, the government add £20 and then the £100 goes to the provider. There are limits to how much they will add per quarter.

So you set up an account online on the government website. Then you give the provider the code.(make sure they accept tax free childcare). Then you pay into the account from your own bank account. Then the government adds a top up equivalent to the tax. (There is a calculator online where you can work out how much to put in they will only give you a certain about (I think its £500) every three months). Then you log on and choose to pay your provider and ta da invoice is done.

You have to reconfirm you are eligible every 3 months you can set up a reminder email.

If you go on the gov website and search tax free childcare you can set up an account. You pay the childcare amount (minus the 20%) into the tax free bank account the bank details will be on the website with your individual tax free payment reference and then the government will top up the extra 20% on top of your payment. You then pay the nursery bill from your tax free account (the money will show on your tax free account)

Set up a tax free childcare account

www.gov.uk/tax-free-childcare

You pay money into it. Your account gets topped up with the 'tax free' amount. You then pay your registered provider from the account directly.

Thank you all

That means I will have to find a provider that can provide exactly what I want for the kids and know the their charges/cost to work out how much the 80% to pay into the account is

Right?

I have employed people in the past you do just school runs for me. I think I will have to find a registered provider that can do that for the 20% tax free allowance.

Yes you'll have to know how much they'll charge to know how much to pay into the tax free account. You can always pay too much in and keep it there. You can withdraw it back into your own bank account (it won't include the 20% top up). Its not so much tax free as "an amount equivalent to the tax you've paid is put onto your account"

DS is in nursery 4 days a week and that uses up all of the tax free allowance. So it may be easier to find someone to do the school runs for you who is not a registered provider given you may not have any allowance left if you are also using it for nursery/pre school.

You can also use it for breakfast and after school clubs.