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Tax free childcare - Me vs HMRC

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Found 14th Jun
Hi all,

Some help required from those of you with either experience of HMRC and tax free childcare, or those with a good understanding of maths...

In the tax free childcare scheme, HMRC tops up my account so that one fifth of the total amount has been contributed by them. A similar way of looking at things, is that HMRC pay in 25% of what I do...

For example, if i pay in £1000, HMRC top up by £250. Meaning that they've paid in 20% of the total funds of £1250, or they topped up 25% of what I paid in.

So, onto the detail....

In late 2017, my automatic HMRC top up stopped occurring. This meant that I needed to apply for compensation for the payments I had continued to make to my child care provider.

Over the course of December to March, I paid my childcare provider £3,385.53.

It's important to note that this is all my money. There's no HMRC top up in that.

I recently received a compensation payment of £677-19.

This is their calculation on what I would have been topped up, had my tax free childcare account been functioning correctly.

I argue that this is wrong.

The £3,385.53 is money paid in entirely by me. They have paid £677.19 on grounds that it's 20% of the total, only it shouldn't be.

It should be 25% of the total - which is £846.38.

Has anyone got experience of this? And would anyone care to tell me I'm not going completely mad?

Needless to say I'm fuming.
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Isn't there a maximum contribution from HMRC of £2000 that runs April to April? Have you hit that cut off point?
From MSE website

"Once your childcare bill exceeds the Government maximum, there's no more financial support. Say your childcare bill for one child is £1,000/month, you'd pay £800 and have £200 paid for – after 10 months, once the £2,000 maximum support has been reached, you'll then have to pay full whack."
David_Jackson20 m ago

Isn't there a maximum contribution from HMRC of £2000 that runs April to …Isn't there a maximum contribution from HMRC of £2000 that runs April to April? Have you hit that cut off point?


Yes there is. And no I haven't.

For the purposes of this example, that is irrelevant. (I know this sounds rude, it really isn't!)
If you get Tax-Free Childcare, the government will pay £2 for every £8 you pay your childcare provider via an online account.


the £2 isn't a bonus its a contribution
so if you imagine your bill was 10quid then in the end it would work out as you would pay 8 and they would pay 2
ofc you pay the 10 first and they give back the 2 which is 20% of the total
brilly4 m ago

If you get Tax-Free Childcare, the government will pay £2 for every £8 you …If you get Tax-Free Childcare, the government will pay £2 for every £8 you pay your childcare provider via an online account.the £2 isn't a bonus its a contribution so if you imagine your bill was 10quid then in the end it would work out as you would pay 8 and they would pay 2 ofc you pay the 10 first and they give back the 2 which is 20% of the total


The first bit of this is right. Yes.

The second bit isn't.

You pay £8 (80%), they pay £2 (20%), or to put it a different way, they pay in one quarter of the money that you do.
fordy626 m ago

The first bit of this is right. Yes.The second bit isn't.You pay £8 (80%), …The first bit of this is right. Yes.The second bit isn't.You pay £8 (80%), they pay £2 (20%), or to put it a different way, they pay in one quarter of the money that you do.


look you even said what they paid: 20%
thread over

heres the sums for you to work out:

totalbill - hmrcpayment = yourpayment

hmrcpayment/yourpayment = ?

basic maths
Edited by: "brilly" 14th Jun
brilly8 m ago

look you even said what they paid: 20% thread overheres the sums for you …look you even said what they paid: 20% thread overheres the sums for you to work out:totalbill - hmrcpayment = yourpaymenthmrcpayment/yourpayment = ?basic maths


You're not really answering the initial point are you? But you're right, it is basic maths.

Based on the fact that I paid £3,385 over 4 months, how much do you calculate that HMRC should owe me in compensation? I'll be interested to hear your answer.
Edited by: "fordy62" 14th Jun
fordy621 m ago

You're not really answering the initial point are you? But you're right, …You're not really answering the initial point are you? But you're right, it is basic maths.Based on the fact that I paid £3,385 over 4 months, how much do you calculate that HMRC should owe me in compensation?


look stop arguing and do the sums i gave you or you are getting detention
brilly1 m ago

look stop arguing and do the sums i gave you or you are getting detention


Oh dear. I think you're trying to look clever, but I can assure you you're failing miserably.
fordy626 m ago

Oh dear. I think you're trying to look clever, but I can assure you you're …Oh dear. I think you're trying to look clever, but I can assure you you're failing miserably.


edit: deleted

do it yourself- you are wrong - end of
maybe you'll be lucky and get someone who is wrong you can agree with
Edited by: "brilly" 14th Jun
brilly5 m ago

heres the thing - i dont need to look cleveri am right, i can do the …heres the thing - i dont need to look cleveri am right, i can do the sumsyou dont even want to listen or to tryheck you have even written enough in your first reply to me to agree with hmrcdunce cap and detention for you


Do the sums then.

If i pay in £1000, HMRC top up by £250. Making the total £1250. Agreed?

So they've paid in 20% of the total, but they've paid in 25% of what I did. Agreed?

I can break it down more simply for you if you require?
Edited by: "fordy62" 14th Jun
fordy621 m ago

Do the sums then.If i pay in £1000, HMRC top up by £250. Making the total £ …Do the sums then.If i pay in £1000, HMRC top up by £250. Making the total £1250. Agreed?So they've paid in 20% of the total, but they've paid in 25% of what I did. Agreed?


look - i am not the one struggling here
i dont need to do sums
YOU need to do sums

do them
brilly1 m ago

look - i am not the one struggling herei dont need to do sumsYOU need to …look - i am not the one struggling herei dont need to do sumsYOU need to do sumsdo them


You do. Because you've realised your wrong. Do the above.
fordy622 m ago

You do. Because you've realised your wrong. Do the above.


thats not whats happened though, i explained it in my first post
you want a bonus on top of the 3grand - thats your mistake
the sums i told you to do would prove that to you but you are unwilling to try and do anything other than let someone agree with you?
If you pay £1,000 don't they then reimburse you 20% which would be £200 not £250?
brilly1 m ago

thats not whats happened though, i explained it in my first postyou want a …thats not whats happened though, i explained it in my first postyou want a bonus on top of the 3grand - thats your mistakethe sums i told you to do would prove that to you but you are unwilling to try and do anything other than let someone agree with you?


A bonus? No.

I just want their correct contribution.

If you look at the equation above, you'll see that they should have topped up 25% of what I paid in. But they only topped up by 20%. Which is wrong.

But you don't understand. So we'll just leave it there.
bp24112 m ago

If you pay £1,000 don't they then reimburse you 20% which would be £200 n …If you pay £1,000 don't they then reimburse you 20% which would be £200 not £250?


No. After they've paid in, they've contributed 20% of the total. There's a subtle but important difference.

The example from their website is "you pay £8, we pay £2"
If you want to work out 20% of what you paid don't you just do £3,385.53 - 80% or have I missed the mark?
fordy623 m ago

A bonus? No.I just want their correct contribution.If you look at the …A bonus? No.I just want their correct contribution.If you look at the equation above, you'll see that they should have topped up 25% of what I paid in. But they only topped up by 20%. Which is wrong.But you don't understand. So we'll just leave it there.


do the sums i gave you for crying out loud and put the answers here
you ARE 100% wrong, 100%
you think you know better than the government? whatever
you think you know better than brilly? HAH!
£3385 is the total amount payable to childcare

as they stopped helping you were liable for the entire charge, paying the 20% they should have paid yourself.

they have now paid your 20% help - £677

£3385-£677= £2708

£2708 - your part
£677 - their part (25% of your amount)

you are incorrectly taking 25% off the total amount rather than your payable amount.

you have been paid the right amount.
But if they pay £2 and you pay £8 isn't that an 80/20% split?
bp24112 m ago

If you want to work out 20% of what you paid don't you just do £3,385.53 - …If you want to work out 20% of what you paid don't you just do £3,385.53 - 80% or have I missed the mark?


Yes. You've missed the mark. It should be 25% of what I paid in.
bp24112 m ago

If you want to work out 20% of what you paid don't you just do £3,385.53 - …If you want to work out 20% of what you paid don't you just do £3,385.53 - 80% or have I missed the mark?


you have missed the mark as you are doing a sum for no particular reason
bp24111 m ago

But if they pay £2 and you pay £8 isn't that an 80/20% split?


Yes. But look at it in this fashion...

They pay in 25% of what i pay in. You can't use the 80/20 split on my figures, because that's all my money and none of theirs.
fordy621 m ago

Yes. But look at it in this fashion...They pay in 25% of what i pay in. …Yes. But look at it in this fashion...They pay in 25% of what i pay in. You can't use the 80/20 split on my figures, because that's all my money and none of theirs.


i explained that in my very first post

your logic and maths are faulty
I'm making things worse here lol 20% of 100 (total) is the same as 25% of 80 (your contribution)
brilly3 m ago

you have missed the mark as you are doing a sum for no particular reason


Why is it a sum for no reason? You're really not getting this are you?

They pay 20% of the total sum. But they haven't contributed, so their amount isn't there to be part of it. So you can't use 20% of the £3,385.

If you just follow the above steps you'll get it.
fordy621 m ago

Why is it a sum for no reason? You're really not getting this are you?They …Why is it a sum for no reason? You're really not getting this are you?They pay 20% of the total sum. But they haven't contributed, so their amount isn't there to be part of it. So you can't use 20% of the £3,385.If you just follow the above steps you'll get it.


the total sum is 3385 - the amount you paid
the total is not more than the amount you paid is it?
oh... penny drops... lucky you did those sums eh?
brilly5 m ago

you have missed the mark as you are doing a sum for no particular reason


Sorry, I thought that sum gave the same answer as your explanation but faster?
bp24113 m ago

I'm making things worse here lol 20% of 100 (total) is the same as 25% of …I'm making things worse here lol 20% of 100 (total) is the same as 25% of 80 (your contribution)


yeah, he wants to be topped up above 3385 despite that being the total not 'his payment'
as per my first post
if he did the sums i supplied hed have seen it and not just wasted everyones time
bp24112 m ago

Sorry, I thought that sum gave the same answer as your explanation but …Sorry, I thought that sum gave the same answer as your explanation but faster?


yeah, its the right 'sum' but had no explanation as to why 20 was right over 25
i see that you do get it though from your other posts
bp24115 m ago

I'm making things worse here lol 20% of 100 (total) is the same as 25% of …I'm making things worse here lol 20% of 100 (total) is the same as 25% of 80 (your contribution)


Yes. Thats right.

Lets use £1000.

I pay £1000. They pay £250. The total is £1250.

Their contribution of that £1250 total, is 20%.

But their contribution is also 25% of what I paid in? 25% of my £1000 is £250. Right?
£3,385-£677 = £2,708
£3,385 - 80% = £2,708
Can I just say, I'm having a wonderful time here lol I hope it doesn't turn sour. I agree with Brilly for the record.
fordy621 m ago

Yes. Thats right.Lets use £1000.I pay £1000. They pay £250. The total is £1 …Yes. Thats right.Lets use £1000.I pay £1000. They pay £250. The total is £1250.Their contribution of that £1250 total, is 20%.But their contribution is also 25% of what I paid in? 25% of my £1000 is £250. Right?


do
the
sums
i
gave
you
And it's turned sour lol
I'm not an expert in this field, but HMRC in the past decade or so have become very good at publishing comprehensive guides (including worked examples) on how they expect things to operate.

Hey, I'm probably like you - I don't like having to pay tax but I accept that it is a necessity.

That being said, someone somewhere in government has decided to make easily accessible and relatively understandable guides to taxation laws. Whomever mandated that is a genius, and the fact that all of their sub-sites seem to follow a similar structure is genuinely fantastic. I might still have to pay tax, but at least I can understand the rules a bit more.

I specialise in the ones about pensions - and I'm not going to get into maths discussion - so with that in mind, all I can do is point you here:

gov.uk/hel…are
Edited by: "weekender" 14th Jun
fordy623 m ago

Yes. Thats right.Lets use £1000.I pay £1000. They pay £250. The total is £1 …Yes. Thats right.Lets use £1000.I pay £1000. They pay £250. The total is £1250.Their contribution of that £1250 total, is 20%.But their contribution is also 25% of what I paid in? 25% of my £1000 is £250. Right?


Fordy I don't understand where the £250 on your £1,000 is coming from? If it's 20% wouldn't they pay £200 of your £1,000?
fordy621 m ago

3385 is my payment you fool. Of course i want to be topped up, because i …3385 is my payment you fool. Of course i want to be topped up, because i haven't been topped up at all.You're really not getting this.


why were you not topped up? cos automatic payments stopped
if they hadn't stopped then what would have been their contribution towards the 3385?

lol @ you fool
bp24113 m ago

£3,385-£677 = £2,708£3,385 - 80% = £2,708


I understand your confusion. And Brilly's for that matter. And if i had paid £2708, then the £677 would have been correct.

But the 3385 does not contain any money from HMRC, so we cannot use it as a figure to base the calculation around.

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