Tax-free childcare account - how does it work?
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So nursery will send an invoice to you. Pay the funds into the government account ('it takes around 2 days to clear so make sure you do it a bit before the bill is due) and then set up a payment from the account to the nursery. The government top up what you've paid in. So example. My daughters invoice used to be sent on the 15th of the month and was due on the 28th. I would pay the amount into the government account when I received the invoice. I would set up the payment to go to the nursery on the 27th just to make sure it was sent on time. The funded hours are paid directly to the nursery they'll claim that themselves.
Be aware that any April 24 babies DONT qualify for the gov funded hours until the summer term - late April. I queried it with both nursery and gov.uk and it's the term after they turn 9 months ☹️
Fees x 0.8 = amount to transfer to TFC account. You set up the nursery as who you are paying & then make a payment. TFC tops up pretty quickly
So when you get your first invoice from the nursery (if your bill is split equally across 12 months - it’s important to find that out). Multiply your invoice by 3, take 500 off that, then divide your answer by 3. That will give you the total amount you need to pay into your tax free account each month to get your £500 each quarter, then you pay the total invoice from the tax free account. If your child is going part time, depending on what the fees are you might not get the full £500. So you would work out what 20% of your monthly fee is and take that off your invoice and pay that in and they will top up the rest x
I get my invoice and take 20% off it. Whatever that number is, I then transfer into the gov account and they top up to reach the full amount, it is then transferred to nursery (you need to set this up from the gov account to leave the account)
You give the nursery the code that they can then use. They should send you and invoice of how much the month will cost you with the 15 hours deducted. If it’s going to be the same every month you can set it up on the account as a monthly payment or you can do it manually each month. I put a set amount in each month and then every couple of months I get a ‘free’ month because the money builds up enough
Thank you all
The 15 hours is paid directly to nursery. They should knock it off your bill. We have worked out what the childcare costs us weekly and we transfer that into the tax free childcare account, they add their top up of 20% within a couple of days then you send a payment to nursery from there.