All of the links on gov sit’s about starting 30 hr free childcare have a warning that it may affect your tax credit entitlement. Surely it on affects the childcare element? At the moment I get 70 percent childcare paid back in tax credit. So I pay 30 percent of my childcare on balance. If I start getting 30 hours free then my childcare bill will go down. Will I not still get 70 percent of it back through tax credit and pay 30 percent myself and therefore although I get less in tax credit (the 70 percent of bill will be a lower amount as my bill will be less) I will also be pain less as my 30percent will be a smaller amount and therefore overall I will be better off?
The warning on the sites says to check that you are better off before claiming free hours. Am I missing something? Why would I not be better off? Can’t I just update my claim on tax credit and say I have a lower childcare bill now? And still get the same percentage paid? I will still have more than the free 30 hours childcare as I have holiday care and a sibling there too for wraparound and holidays.
Am I missing something like a threshold? The warning just seems to imply there could be an adverse effect and I can’t see what that would be.