Childcare Vouchers: cut childcare costs by £1,000/year Discussion Area

Underscore

Have contacted them via email already.

From a self-employed POV, the scheme costs about 7% to administer at its cheapest (from what I have seen) - so want to make sure I can make full use to make the setup etc worthwhile. Did not think about summer clubs/after school activities though - thanks!

rpc

It may cost 7%, but depending on how you structure your company and pay, you can save on the employers NIC.

Underscore

No NIC benefit - would only be so if you didn't make most efficient use of dividends already, surely? Which if you aren't doing and are self-employed/running a small business, you should be worrying about before worrying about childcare vouchers?

rpc

That's why I said "depending on company structure and pay" :-)

swerytd

Hi

We're having our first child soon and my employer has an on-site nursery. It also runs a childcare voucher scheme and a salary sacrifice scheme.

Couple of questions I'd appreciate answers to if anyone knows:

(1) My wife works somewhere else and can also get vouchers. However, these vouchers are 'branded' differently ie one is KidsUnlimited, one is Edenred. Would we be able to use both types in the nursery? All a bit confusing with these different 'types' of vouchers!

(2) Would it be better for us to use both lots of vouchers than for me to join the salary sacrifice scheme completely? It sounds like I can take the complete cost of the nursery out of my salary, though I can't find anything saying if this is better than two lots of vouchers. I assume under salary sacrifice, I'm still subject to the £55 max or have I misunderstood and am better off paying it all from my wages?

Thanks for help

rpc

swerytd wrote: »

(1) My wife works somewhere else and can also get vouchers. However, these vouchers are 'branded' differently ie one is KidsUnlimited, one is Edenred. Would we be able to use both types in the nursery? All a bit confusing with these different 'types' of vouchers!

It depends on the nursery, but usually yes.

(2) Would it be better for us to use both lots of vouchers than for me to join the salary sacrifice scheme completely? It sounds like I can take the complete cost of the nursery out of my salary, though I can't find anything saying if this is better than two lots of vouchers. I assume under salary sacrifice, I'm still subject to the £55 max or have I misunderstood and am better off paying it all from my wages

Assuming you are both basic rate taxpayers, you get tax relief up to £243/month in vouchers. If that covers all your nursery fees, it makes no difference if you take that as 1x£243 or two smaller sums. If your nursery costs are greater than £243/month then obviously there is a tax benefit in a second person claiming vouchers.

It may be that there are further changes and existing voucher arrangements are grandfathered in, but that's probably a small risk just now e.g. I could get 40% tax relief on my £243 if I paid higher rate tax because I joined before that change was made, while new scheme members can only get 20% tax relief.

In theory, you can get as much as you want in childcare vouchers, but only the first £243 a month gets tax relief. In practice, most schemes/employers limit you to £243 a month.

If you aren't both basic rate taxpayers (and would remain so after the sacrifice), the above changes a bit.

swerytd

Thanks for the info, rpc

The nursery costs are greater than that for this nursery, so it makes sense for us both to take the full amount each month in vouchers. Both basic-rate taxpayers.

co123456

If my wife becomes a registered child minder, could I obtain Childcare Vouchers from my employer and use these to pay my wife for looking after our children. Would that be legally compliant?

cheribshelby

MSE_Archna wrote: »

Please help I'm confused!?!

I've been receiving childcare vouchers for the past 4 years, and my son has now started school, so will only need formal childcare for the school holidays. Would it be best for me to reduce the vouchers to the minimum amount (if that's possible) and accumulate vouchers to pay for the school holidays or cancel them altogether and see if I can claim tax credits (our joint income is approx £49,000 before tax). I'm also concerned that if I come off the scheme altogether then I would be subject to the new childcare voucher scheme and won't get as big a tax break if I have another child?

I hope this makes some kind of sense?

Many thanks

wackojackouk

Hi everyone

Wonder if someone can offer me some advice.

I work and am just over the higher rate threshold and my OH is a stay at home mum as we have a daughter in nursery (mornings only) who's nearly 4 (starting full time in Sept) and twin boys who are 3 mid september.

As they are not 3 before end of August we were told they would go in to nursery the following year (with a slight chance of an early intake in Jan 2013) by the same nursery/school our daughter goes to.

We have today been offered two places at a different nursery for two mornings a week for the boys but been informed we would need to pay as the cut-off period (or something) is Aug 31 for grant eligible (I dont know the full details).

They said from January we wouldn't have to pay due to the eligibility but with two boys thats £48 a week for 12-14 weeks from September onwards (£600-£700).

However, my company does participate in the Childcare voucher scheme but I believe if you join this you join for a full 12 months and tbh we only require it for 3 months or so, until they get around this eligibility thing. (My OH doesn't work because of the children and isn't really going to get a job for 3 hours a day, twice a week. She does plan on returning to work however once they attend school full time in a couple of years).

Does anyone know if it is possible to get around the 12 month option? - I read something about lifestyle changes etc but these dont seem to fit our criteria (getting married/divorced, starting part time job etc). Is this set in stone or could it purely be at my companies discretion?

Cheers

WJUK