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Wendybird
23-10-2011, 10:14 AM
Honestly I (foolishly) didn't think I'd get many familes who used TC as I charge at the upper range for my area and live in a well-to-do part of town. But it is turning out that isn't the case and I'm getting questions about TC that I can't answer! I charge 4 weeks deposit and monthly fees in advance - does anyone know if TC will pay out for the deposit as well as fees in advance?? Do I need to devise some other payment structure so that I am not discriminating against families who don't have savings or earning sufficient to cover such a large initial expense?

lolli_pop243
23-10-2011, 11:38 AM
I have looked at the tax credit website info for child care providers- this is the link to the PDF document.
As far as I know they do not pay towards deposits, just towards the fees in respect of care provided.

http://http://www.hmrc.gov.uk/leaflets/wtc5-hs.pdf

Hope this helps you. :)

sarah707
23-10-2011, 11:41 AM
No tax credits do not pay for deposits.

However you need to remember and explain to parents that your agreement is not with tax credits - it is with them.

If tax credits are slow to pay or do not pay or something goes wrong with the system that's not your problem!!

Parents need to pay you regardless following your terms and conditions. However a months deposit and a month in advance for a full timer might be out of the reach of many families so maybe you need to consider how you can make your service more accessible if it's becoming a problem.

Hth :D

Wendybird
23-10-2011, 12:02 PM
Thank you both - that is really useful! I need to have a think about my fee structure I think. I don't want to be chasing money or people running off without paying final fees - so maybe regular payments towards deposit so it isn't such a big chunk of money.

stardust
23-10-2011, 03:39 PM
I take 4 weeks deposit and the payment in arrears this way its only one lot to stump up and if they don't pay my deposit covers it. xx

jelly15
23-10-2011, 06:54 PM
This is an interesting thread. I have only had one parent who said that tax credits were late so she couldn't pay me the full amount, it took quite a lot of explaining that I wasn't interested how she gets her money only that I get paid as per contract. I think I will put something in my prospectus/boochure so that I don't have to endure an uncomfortable conversation if it arises in the future. Does anyone else do this and if so how did you word it?

rosebud
23-10-2011, 07:07 PM
I take the first months fees as the deposit to hold the place. If they cancel it is non-refundable so I am not out of pocket but as long as they take the place they have paid the first months fees and don't have to worry about it. They only have to find one lot of fees but it is enough to ensure they are committed to the place and it is then always paid in advance.

That said you do need to consider peoples individual circumstances and I have just taken on a new family with 2 children and there was no way they could find £600 up front to pay me for the first month (let alone £1200 if it had been deposit AND first months fees) so I have agreed weekly payments in advance for the first 6 weeks and then it will change to monthly.

Helen79
24-10-2011, 08:16 AM
I think it's a big assumption that parents who use tc will be bad payers or not well off or have savings. I think the threshold for getting the childcare element is quite high so don't assume that receiving tc means that the parents are poor.

I don't charge a deposit but I do ask to be paid in advance. I give parents a weekly payment plan for the 1st month if they need it so that they can catch up with payments before they get their tc payment or 1st wage after going back to work.

Becci26
24-10-2011, 08:37 AM
Helen79 I'm not sure that is what the other posters are implying but I do agree with you.
When my daughter was 1 I ended up a single mum with very little money and no support. I worked full time and received TC's for child care, and I was NEVER late paying fees, most months it was a real struggle others were a little easier but the nursery was always paid. at the end of the day, the way I looked at it, if you dont pay, your child cant go to child care, you cant work = no money so would be a lot worse off!

Wendybird
24-10-2011, 07:35 PM
I wasn't implying anything - just realising that my 'airtight' plan for not having to chase money at the end of contracts (which seems to happen a lot on here) might be putting me out of reach for some families which isn't fair. I have no idea what the limit is for the child care element of TC, but we wouldn't qualify and are not well off by any means. But, of course, there are going to be huge regional differences and I live in an expensive area! ;)

Helen79
24-10-2011, 08:09 PM
I wasn't implying anything - just realising that my 'airtight' plan for not having to chase money at the end of contracts (which seems to happen a lot on here) might be putting me out of reach for some families which isn't fair. I have no idea what the limit is for the child care element of TC, but we wouldn't qualify and are not well off by any means. But, of course, there are going to be huge regional differences and I live in an expensive area!

Sorry think I misunderstood your op. I think someone had posted on here a while a go saying that they would prefer families who didn't use TC which I found a bit snobby and thought you were posting along the same lines :blush: I think saying that you live in a well to do area so didn't think parents would claim tc is a maybe naive of how tc works and sounds a little bit rude, although I realise it's probably not how you meant it, just how I've read it iykwim. I think the limit is about 40k for the childcare element.

I've never had to chase payments at the end of a contract so have probably been lucky with that so never asked for a deposit, just ask for payment in advance.
I think you'll just have to gauge the response to a deposit. I wouldn't have been able to pay one and wouldn't have been able to pay more each month to build up a deposit either so not sure what the solution would be to secure your last month's fees if they do a runner for families who genuinely can't afford a deposit.

Wendybird
24-10-2011, 08:38 PM
No offense taken, I was naive, which is why I was asking for help! I didn't realise the limit was that high. I'm not snobby and certainly didn't intend to be rude - promise! Just trying to learn the ropes :)

lolli_pop243
24-10-2011, 11:55 PM
There are two elements to tax credits, one is the child tax credit which is money that is paid towards your children if you have any, and the other is the working tax credit. As part of working tax they pay for childcare. Both payments are affected by your (joint) income(if you have a partner) and they will reduce your working tax payments first if you earn over a certain amount. You can still get payments towards childcare even if the amount of working tax you receive is zero due to income. I dont know the actual threshold for that is.

It takes about 2-3 weeks to process a straight forward claim, and it is the claimant's responsibility to ensure they keep tax credits up to date with any changes as they may affect entitlement to payments. I get the childcare element and some of my child tax credit is reduced due to my wages, but I wouldn't be able to work without getting this help.

If you need more general info, please feel free to PM me, or for more specific stuff, their helpline number is 08453003900. Hope this helps a bit more.