Childcare vouchers - please help!

aleka11

Hi

I have decided to utilise my employers childcare voucher scheme which is provided by Care - 4.

My current gross salary is £36,050 per year and I thought I am a basic tax payer therefore I could take advantage of £242 tax free allowance per month.

This month they took the first money ( salary sacrifice) and only provided me with £124 tax free allowance so basically the same as a high tax payer.

This is the response that I got from my payroll team:

I have checked with Care-4 and unfortunately when the calculation is done to split the relief, your gross earnings before tax is taken into consideration and due to your salary being above the £35,000 which would take you into the 40% band, the care-4 has been duly adjusted.

Surely that is a mistake? I thought the tax free allowance is determined according to my tax rate not my gross salary being over 35K?

Help please

Many thanks

salau2

The Higher rate income tax (40%) band for 2011/12 is £35,001-£150,000.

aleka11

salau2 wrote: »

The Higher rate income tax (40%) band for 2011/12 is £35,001-£150,000.

thanks for your response and yes you are right but after the tax allowance is taken out of your gross salary according to the tax office.

So in effect you need earn around 42K and over to be high tax rate payer