Childcare Vouchers: cut childcare costs by £1,000/year Discussion Area
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As long as no illegal discrimination is involved then yes the employer can restrict the availability of salary sacrifice. Legally, the cannot sacrifice salary below the minimum wage but there is nothing explicitly stopping them from setting a higher threshold.
Most employers continue to offer Childcare Vouchers during maternity leave and when you fall onto SMP / nil pay they cannot deduct from salary so they bear the cost of the vouchers and you still get them. I continued to receive Childcare Vouchers whilst on SMP and nil pay during maternity leave for my second child.0 -
Can anyone help?
I have set of childcare vouchers today with the scheme my employer uses. My husbands employer also offers childcare vouchers with an alternate provider.
We only use childcare one day a week so we do not need to register with both, but would we have been better registering through my husbands income as he is the full time, primary earner whereas I will be part time and earn under the tax threshold?
I hope that this makes some sense to someone and you can help.
Thank you!
Yes you will save tax by taking them from your husband's (taxed) waged rather than from your untaxed wages.0 -
girllikeme1 wrote: »Most employers continue to offer Childcare Vouchers during maternity leave and when you fall onto SMP / nil pay they cannot deduct from salary so they bear the cost of the vouchers and you still get them. I continued to receive Childcare Vouchers whilst on SMP and nil pay during maternity leave for my second child.
Which falls within the "as long as no illegal discrimination is involved" caveat. Although there has been an increasing feeling that removing "free" vouchers might not actually be discrimination. There was talk of pushing for a tribunal ruling, I suspect with tax free childcare on the way nobody is that bothered any more.
Because of the pregnancy, providing vouchers at no cost to an employee on SMP who received them while working is NOT at all the same as sacrificing pay below national minimum wage or some other threshold. One is believed to be unlawful discrimination and the other is still discrimination but not unlawful.0 -
I currently work part time (22 hours a week) and therefore fall beneath the tax bracket although I do pay a small amount of NI. My husband works full time and participates in the childcare voucher scheme at work.
I looked before into getting childcare vouchers with my employer but was told I came under the national wage and had worked out myself that I'd be worse off if I did as there would be no benefit due to the fact I am below the tax threshold.
Would I still be able to sign up for the tax free childcare gov scheme if my husband carries on with childcare vouchers?
Any thoughts?0 -
Playfulkit wrote: »Would I still be able to sign up for the tax free childcare gov scheme if my husband carries on with childcare vouchers?
No. One household cannot be part of both schemes.
Paragraph 2.53 in the following: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/318953/PU1607_Tax_free_Childcare_response.pdf0 -
apologies if that has been addressed elsewhere but I struggling to get a straight answer on this.
I'm trying to weigh up vouchers vs tax free.
With vouchers I get £55 per week to spend on child care vs tax free which will pay 20% of the cost of child care. Is that correct?
So if I only had childcare for 3 days costing £120 per week, vouchers will cover £55 of that (46%) vs £24 tax free (20%)
Is that correct or is the £55 voucher conditional on some sort of minimal childcare bill and if it is how are people claiming vouchers well in advance of needing the care?0 -
I get childcare vouchers through salary sacrifice with my employer but my husband doesn't as his company do not have a scheme. Is it possible for me to continue to get the vouchers and for my husband to apply for the tax feee childcare? I'm not sure if you can mix and match?0
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apologies if that has been addressed elsewhere but I struggling to get a straight answer on this.
I'm trying to weigh up vouchers vs tax free.
With vouchers I get £55 per week to spend on child care vs tax free which will pay 20% of the cost of child care. Is that correct?
So if I only had childcare for 3 days costing £120 per week, vouchers will cover £55 of that (46%) vs £24 tax free (20%)
Broadly correct. There are winners and losers with the new scheme both in terms of eligibility and in terms of the amounts on offer.
Simple summary of the differences here: http://www.moneysavingexpert.com/family/childcare-vouchers#which
More in depth analysis:http://www.thisismoney.co.uk/money/guides/article-3708634/Tax-free-childcare-way-family-better-compare-childcare-vouchers.html
Which option is better depends entirely on your individual circumstances. There is no simple answer.I get childcare vouchers through salary sacrifice with my employer but my husband doesn't as his company do not have a scheme. Is it possible for me to continue to get the vouchers and for my husband to apply for the tax feee childcare? I'm not sure if you can mix and match?
The answer is 2 posts above yours.0 -
Hi
I am a higher rate tax payer who currently uses the childcare vouchers system.
My husband is a basic rate tax payer whose employer does not offer the childcare voucher system.
We have 1 child in childcare costing £850 a month and another on the way in July.
Are we better off joining the Tax Free system?
I haven't seen any scenario that fits ours.
thanks0 -
So you save either £630 or £1250 a year using vouchers as a higher rate tax payer.
You spend £10,200 on childcare, of which £10,000 can benefit from the new scheme. Under the new scheme, you would save £2k.
When number two arrives, you get another £10,000 allowed costs so you can save up to £4k. You voucher savings wouldn't change.
Seems quite straightforward to me - go for the new scheme.
Using the new scheme will affect your salary (it isn't salary sacrifice) so there could be an impact on child benefit charge and other salary related benefits/taxes.0
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