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

Underscore

there must be a process, would check their Ts and Cs carefully.

My business partner had a few thousand quid refunded when he realised they were not going to use their vouchers - through Busy Bees. Taxation considerations obviously and they don't refund their admin fees, naturally, but still, quick, easy and fair.

rpc

From the Kiddivoucher scheme rules:

Can I receive a refund for unused childcare vouchers?
Under HMRC rules, refunds are only allowed if you are unable to use your vouchers as a result of exceptional and unforeseeable circumstances.
Any refunds will require the agreement of your employer. Refunds must be processed through PAYE, so tax and National Insurance will be deducted.
Please note that large refunds may take your pay into the next tax band.
You must not accept any cash or change from your childcare provider in respect of your childcare vouchers.

From HMRC:

Can an employee return unused childcare vouchers to the employer? If so, are they put through the payroll as income to collect Tax & NICs?

• The tax and NICs exemption applies to non-cash vouchers only. Childcare vouchers are, by definition, non-cash vouchers. They are issued to be used in exchange for childcare and nothing else. So, if an employee is entitled to cash-in unused vouchers as a matter of course, this would mean that the intention of the voucher is for either childcare or cash. The exemption would not therefore apply to any of the vouchers provided by the employer.
• That said, HMRC accept that unforeseen circumstances can arise which mean that a voucher cannot be used for the purpose for which it was intended (for example, death of the child, redundancy of one parent etc). Where such a situation occurs, and the employer agrees to exchange the unused voucher for cash, HMRC will continue to regard the voucher scheme operated by the employer as a non-cash voucher scheme for the purpose of applying the exemption.
  • Those vouchers which are exchanged for childcare will accordingly be non-cash vouchers for the purpose of the exemption.
  • But cash payments made in return for vouchers in the unforeseen circumstances outlined above would be liable for tax and Class 1 NICs in the normal way.

stevem999

Thanks Underscore, that's what I thought, but then seeing rpc's post, it seems as though Kiddivouchers will only do it in exceptional or unforeseen circumstances! HMRC suggests that is death of a child or redundancy. Apparently Kiddivoucher and HMRC have a much better crystal ball than I have and can foresee everything in life apart from death or redundancy.

I feel a letter to Kiddivouchers chief exec coming on.

Walker10

Hello,


We have a problem with our childcare provider.


They do receive childcare vouchers but are refusing to accept vouchers off our provider even though they are a legitimate company.


Is this legal as we are losing money as a result of this.


I cannot find out off the internet who would be able to give us an answer about this.


Thanks for any information that can be provided.

rpc

My understanding is that yes, childcare providers are free to accept or decline vouchers from the different companies. Just the same as they could refuse to accept payment by stuffed brown envelopes or credit card, but accept bank transfers.

It seems rather daft to refuse and it isn't like parents are the ones who choose the voucher provider. Have they said why?

siz

Hi everyone
I've a couple of questions about childcare vouchers I'm wondering if anyone can help answer.

1) Can an employer charge the employee a fee for the administration of childcare vouchers based on the amount they have opted to receive (on top of the savings the employer make in NI contributions?)

2) Can an employer restrict when an employee is able to join the childcare voucher scheme they run (eg only in April and October) or is there a general right to receive these vouchers?

Thank you in advance!

Crabapple

I don't know the answers to those specific questions but know an employer does not have to operate the scheme at all.

My husband and I both worked for employers who refused to join up so we had no benefit. I've now moved work and thankfully the new employer does offer vouchers.

Roll on the changes so we can do things ourselves and finally get access to all the tax relief available.

GobbledyGook

Walker10 wrote: »

Hello,


We have a problem with our childcare provider.


They do receive childcare vouchers but are refusing to accept vouchers off our provider even though they are a legitimate company.


Is this legal as we are losing money as a result of this.


I cannot find out off the internet who would be able to give us an answer about this.


Thanks for any information that can be provided.

Childcare providers are not obliged to accept vouchers from anyone.

Have they said why they won't accept them? I know a friend paid the £50 fee it cost her childcare provider to set up with a voucher provider because the provider wasn't willing to pay it and she knew she'd save far more than £50 over the piece.

Walker10

GobbledyGook wrote: »

Childcare providers are not obliged to accept vouchers from anyone.

Have they said why they won't accept them? I know a friend paid the £50 fee it cost her childcare provider to set up with a voucher provider because the provider wasn't willing to pay it and she knew she'd save far more than £50 over the piece.

The childcare provider has said that they receive vouchers from around a dozen different schemes already and don't want anymore.


I know childcare providers do not have to accept vouchers off anyone but once they accept vouchers from one provider then it is my belief that they should have to accept them from everyone otherwise they are discriminating and putting some parents at a financial disadvantage.

rpc

siz wrote: »

1) Can an employer charge the employee a fee for the administration of childcare vouchers based on the amount they have opted to receive (on top of the savings the employer make in NI contributions?)

2) Can an employer restrict when an employee is able to join the childcare voucher scheme they run (eg only in April and October) or is there a general right to receive these vouchers?

Don't know for sure, but I suspect both are probably OK. Greedy bu:mad::mad:ers though - the NI saving usually more than covers the cost of running a scheme (very small employers may not find this with every scheme, but some just operate a fixed percentage fee which is less than the employer NI saved).