Can we get childcare vouchers?

sillysausage237

We would like to put our 1 year old into nursery of some sort and I had a look at this thread

http://www.moneysavingexpert.com/health/childcare-vouchers

about childcare vouchers and how you can claim them from your pre-tax income.

My husband has his own company of which he is the Director and sole employee. He pays himself minimum wage and the company pays companies tax and gets dividends. He works as a contractor to other companies who pay his company and from there he pays himself PAYE and the companies tax etc. He is therefore not self-employed although this is quite a complicated set up. This is all completely legal btw.

Would he be able to set up the childcare vouchers scheme himself through his own company so that we can reduce the costs of childcare and if so, how can he find out how to do this? Although he makes quite a bit through the company we have a lot of outgoings and are not entitled to any kinds of benefits as his earnings are too high once the company dividends are factored in to his income tax submission form plus we have a very small amount of savings that just takes us above the threshold.

I am hoping to start a full-time vocational college course so that is why we intend to put our little one into childcare.

Any advice would be helpful. Thank you.

surreysaver

If he is only paying himself minimum wage, then he will not be able to pay himself any childcare vouchers. The reason is that childcare vouchers are a 'salary sacrifice' - ie to receive the full entitlement your salary is reduced by £243 per month, so that would effectively take him below minimum wage. He would have to give himself a pay rise - but at such a low wage, I am not sure if it is advantageous to get childcare vouchers - other benefits (WTC/CTC) may be more beneficial.

Spendless

Agree with the above, but the only way you will get help with childcare via tax credits is if you both work 16 hours a week, you going to college doesn't count. Would working 16 hours a week plus studying be an option?

myrnahaz

Have you checked with the inland revenue? Try their website or just give your local office a ring.

Couldn't he employ you as a bookkeeper or something in the company? He can split his pay in two, pay himself half, pay you the other half and so make use of your tax allowance. You'll end up with more cash in your pocket. I can't remember the actual figures, but if the current tax-free allowance is over £5000, and the starting tax is now 20%-ish, then you'll be over £1000 better off each year.