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So would you qualify for childcare vouchers or extra tax credits if you were paying for 'proper' childcare? If so then it would be a no-brainer for me - I would use a (cheaper) nursery and get the extra tax credits as well! And when she turns 3 she will already be in a place where you can...

If she's taking your child to her home each day I think she may have to register as a childminder and be prepared to look after another child who isn't hers, and to have inspections. I assume you are not talking about cash in hand/grey market? £800 net is pretty steep but you could then claim...