Tax free childcare - £55 a week or £243 a month?

[psychocandy]

But thats different unless my calculators broke????

My understanding is that as long as the yearly total is under then you're ok. i.e. £1 week 1, £109 week 2 is ok because its still under £55 a week.

But which one do you use to calculate yearly?

£55 x 52 = £2860
£243 x 12 = £2916

Weird - surely they should have used £238 as the monthly figure. Someone at HMRC can't count....

[sal]

Since most nurseries operate with monthly payments, that's what I use, £486/month for mine and the mrs.sal allowance and top-off from personal account

[psychocandy]

Since most nurseries operate with monthly payments, that's what I use, £486/month for mine and the mrs.sal allowance and top-off from personal account

Ah thats just it - our costs are different every month. Depends what shifts the mrs is working. Luckily we've got a very flexible childminder.

In the past, accountant told me its ok as long as it averages out over the year.

What happens if you go over? I guess it becomes a BIK then? Or it really bad like whole lot becomes BIK then?

Current forecast is it might go over this year. So I guess come march I'll be paying some personally.

Mrs works but only part-time so pays no tax or ni anyway. She does have a childcare voucher scheme but obviously its not saving anything doing this. (Although saying that she pays 7.1% nhs pension - anyone know if this is taken off gross before or after childcare payments are taken out.)

I know if she takes an nhs lease car it lowers the pensionable pay.

[pr1]

crude maths

55/7 * 31 = 243
so, if all months were 31 days, it's the same monthly or weekly, i.e. bonus for months with less than 31 days

I was told by my accountant it's a monthly limit i.e. you can't fluctuate across the year - if you don't use all your allowance in month 1 it's gone, you can't use double in month 2 - I didn't bother checking to prove/disprove, but I guess that's what CUK's for

[Andrew@Wisteria]

It's 53*£55 (don't ask!)

[psychocandy]

It's 53*£55 (don't ask!)

Only HMRC could think like that!

[blacjac]

I was told by my accountant it's a monthly limit i.e. you can't fluctuate across the year - if you don't use all your allowance in month 1 it's gone, you can't use double in month 2 - I didn't bother checking to prove/disprove, but I guess that's what CUK's for

My accountant told me the opposite.

I was told to log on a spreadsheet our payments to the nursery and they then sorted out the tax at year end.

[sal]

AFAIK the sum above the allowance is simply treated as BIK, not the entire sum if you go over. The hint is in the name "allowance"

You can't roll-over allowance, but you can roll-over vouchers. If you have fluctuations sign up YourCo for a voucher provider like kiddievauchers start issuing vouchers up to the allowed limit every month, and only use as much as you need. You will have to pay the fee of couple of % but it might be worth it in the long run.

[pr1]

My accountant told me the opposite.

I was told to log on a spreadsheet our payments to the nursery and they then sorted out the tax at year end.

there's probably a line of reason somewhere in the middle (i.e. maybe you can fluctuate across all 12 months but i suspect you wouldn't be able to claim £2916 across three months and nothing for nine months, which was effectively my question as my daughter started nursery part way through the tax year)

[allaboutthebenjis]

My accountant told me the opposite.

I was told to log on a spreadsheet our payments to the nursery and they then sorted out the tax at year end.

Same for me, also applies whether they are at nursery or not (my kids have 2 months off at Summer and I paid the 3 months together when they went back)