childcare vouchers

northerner_2

There is a great article written by Martin on Childcare Vouchers...
http://www.moneysavingexpert.com/cgi-bin/viewnews.cgi?newsid1129566540,79743,

As someone who has recently become a father for the first time, I was wondering if it is possible to begin collecting Childcare Vouchers now, with the intention of using childcare later in the year... once we begin childcare we could use 9 months of vouchers for Sept-Dec childcare.

If possible then we could save quite a bit more money.

Any thoughts please?

cheddar

I think you might get a reply if you post on the childcare vouchers thread on this board.

scope

You can build up credit with childcarevouchers, but I think to start the thing in the first place you need to have your child in a registered nursery (daycare, whatever). Give them a call and ask, they should know..

On another note, Childcare vouchers is a brilliant way to cut the cost of childcare and works really well. Me and my wife both get the vouchers and are able to pay the nursery in full using the vouchers, and save about £2000 every year doing this. The government has just increased the amount from £217 to £243.

Rhiannon_of_Woolamai

Take care with this, and the Home computer scheme. They are both based on salary sacrifice. See here http://www.hmrc.gov.uk/specialist/salary_sacrifice.pdf

It means that you are agreeing to benefits and taking a cut in salary. You have no automatic right to your original higher salary (even when you stop taking the benefits), if you have a final salary pension scheme (in either intend to leave or get made redundant), or take maternity leave, or sick leave your payments for these will be lower as they are based on your salary (which is lower).

Just take care - and get proper advice. It's not money for nothing

Inland Rev. site says

What do employees need to consider if they are thinking about entering into a salary sacrifice arrangement? When entering a salary sacrifice arrangement to replace part of cash pay with a benefit that is tax and / or NICs exempt it is essential to understand what the sacrifice will mean in practical terms. Employees should consider carefully the effect, or potential effect, that a reduction in their pay may have on:
* their future right to the original (higher) cash salary
* any pension scheme being contributed to
* entitlement to Working Tax Credit or Child Tax Credit
* entitlement to State Pension or other benefits such as Statutory Maternity Pay

Woby_Tide

Rhiannon_of_Woolamai wrote:

Take care with this, and the Home computer scheme. They are both based on salary sacrifice. See here http://www.hmrc.gov.uk/specialist/salary_sacrifice.pdf

It means that you are agreeing to benefits and taking a cut in salary. You have no automatic right to your original higher salary (even when you stop taking the benefits), if you have a final salary pension scheme (in either intend to leave or get made redundant), or take maternity leave, or sick leave your payments for these will be lower as they are based on your salary (which is lower).

thats a blanket statement and incorrect. Each company can set up teh scheme how they want to and the above is not true in all cases. Check with your own employer how they treat your salary and benefits. Don't rely on what others tell you.

Rhiannon_of_Woolamai

Woby_Tide wrote:

thats a blanket statement and incorrect. Each company can set up teh scheme how they want to and the above is not true in all cases. Check with your own employer how they treat your salary and benefits. Don't rely on what others tell you.

It's not incorrect - look at the Inland Revenue site for clarification and this site is quite helpful http://www.childcarevouchers.co.uk/salarysacrificeguide.asp

That's exactly what I'm saying is don't assume that it is some great tax break to save you lots of money - it might work for you, but if there is any chance of redundancy or you taking maternity you may actually be worse off. So take care, and look into it thoroughly first!!

ps I wouldn't rely on what you're employer tells you either - they often haven't really appreciated the implications either!

Spendless

Woby_Tide wrote:

thats a blanket statement and incorrect. Each company can set up teh scheme how they want to and the above is not true in all cases. Check with your own employer how they treat your salary and benefits. Don't rely on what others tell you.

That is most certainly the case with DH employer. These vouchers have been a godsend for us. We have managed to suspend them for a short time, change DD nursery. Hubby is not in a final salary pension, but the pension is taken from his top line before the vouchers come off. He won't be taken maternity leave:p and having worked there just 2 years would get very little redundancy anyway. Sickness I'm not totally sure of, but for us the benefits far outweigh any possible negatives the scheme may have.

Mado

I have been told you can accumulate them, but one of the first question on the registration form is the name of your childcare provider.... so Enrol babe somewhere and you don't have to start paying them right away....