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

Hartley10

rpc wrote: »

Your basic salary is not below the threshold because of the BIK. For you, 40% tax starts somewhere around £37k. Presumably you have a tax code of 264 or thereabouts? That modifies the threshold.

The employer will do the assessment and should come to the conclusion you are only entitled to the lower amount of vouchers.

That was my own assessment of it too and i expect to be told that the lower amount of vouchers will be my entitlement going forward. Thanks

hullabaloo2_2

I've not read the entire thread but most of it and can't see this mentioned before.
Does anyone else have an issue with the assessment their employer has carried out? I am a basic rate tax payer but my employer classes me as a higher rate tax payer based on their interpretation of the assessment rules so I can only receive half the vouchers.
I have tried HMRC and as it's salary sacrifice, they don't see the figures to refund any overpayment or query any data.
My employer insists they are correct so where does that leave me? Has anyone else had this problem?

sweaty_betty

If I was in your situation I'd find my p60 and print out the voucher guidance and ask for an appointment with HR/finance/whoever deals with childcare vouchers and ask to talk it through with them. Not in an angry way but explain that you'd like to understand how it works.

Your gross salary would include any bonuses or taxable benefits in case you're overlooking this. Also I'm not sure how any other salary sacrifice scheme (eg pensions etc) would be taken into account.

hullabaloo2_2

Thanks. I've had several discussions with HR and it seems to be that the rules (at least their interpretation of them) for the Basic Earnings Assessment, are not the same as those for income tax so my P60 is no guide.
I think the difficulty is that they add on some money to my basic salary and then deduct money for tax free benefits such as life insurance and pension. They only deduct the pension money for the assessment not all the other things which leaves me just over the limit but actually my taxable pay is a lot less and would be even less if I was getting the full amount of vouchers tax free.

Rorthryneliachlo

I work for the NHS, but as a casual employee, so am not guaranteed any shifts. Despite this, I regularly work 23 hours a week and am aware that there are always shifts available 7 days a week. My payroll dept are refusing to allow me to join the scheme as they say there is a chance that I won't get any shifts and therefore won't earn the money to make the salary sacrifice. The woman that runs the scheme says this wouldn't be a problem because the paper vouchers would simply become invalid and I would have to find alternate means of payment. However, she cannot overide the payroll decision. Any suggestions?

beefturnmail

I am also disputing my employers calculation of the Basic Earnings Assessment - they have not taken into consideration the salary sacrifice for the vouchers themselves when making the assessment. This seems contrary to hmrc's own guidance to me. Has anyone else had this problem?

rpc

beefturnmail wrote: »

I am also disputing my employers calculation of the Basic Earnings Assessment - they have not taken into consideration the salary sacrifice for the vouchers themselves when making the assessment. This seems contrary to hmrc's own guidance to me. Has anyone else had this problem?

It's quite clear. The question overlaps pages 14 and 15 of http://www.hmrc.gov.uk/thelibrary/employer-qa.pdf

The post-sacrifice salary is used.

Also interesting to note that the same document says that, unless you earn over 150k, the basic personal allowance is used in all cases and not an individual one. This changes some of the answers to Hartley10 above and the BIK tax shouldn't matter.

beefturnmail

rpc wrote: »

It's quite clear. The question overlaps pages 14 and 15 of http://www.hmrc.gov.uk/thelibrary/employer-qa.pdf

The post-sacrifice salary is used.

Well quite, but any ideas on how I get my employer to accept they are wrong? They've miscalculated the assessment meaning my first allowance for 2013-14 is at the incorrect lower amount.

I've pointed this out to them via e-mail, but this has so far gone unanswered. Do I have any 'right' to insist they calculate it correctly, or am I basically hostage to their mistakes?

rpc

Ultimately, it is up to the employer. They are not allowed to do a second assessment during the same tax year.

HMRC do not provide guidance for employers fixing mistakes in your case. They do say that if benefits are overpaid (i.e. you were given more vouchers than you should have been) then it is fixed by a P11D. They don't say anything about getting it wrong in the other direction (given less vouchers than entitlement).

Emails are easily ignored. Either phone or visit desks. I think that if they persist, you may just have to live with it.

beefturnmail

hmmm. I am continued to be ignored by my employer on this one. What annoys me the most is that when I spoke to my employer about it (a different person in payroll) some months ago they told me that the do remove the value of the childcare vouchers when making the Basic Earning Assessment. I wonder if the calculation isn't being applied consistently to all staff or someone has screwed up and they are hoping that I will just give up if they ignore me (Note payroll is in a different location so I can't physically visit)

How could I force the issue with them - raise a grievance via letter or is that a 'nuclear' option - I obviously need to be careful as this is my employer but it's an effective pay cut of £700 which isn't peanuts - I feel I at least deserve a proper explantion.