Loophole in Childcare Voucher Scheme

tipmeister

I have been lucky enough to benefit from a loophole in the governments childcare voucher scheme and thought I'd pass it on. For more details of the scheme see Martin's article http://www.moneysavingexpert.com/cgi-bin/viewnews.cgi?newsid1129566540,79743,

If your spouse/partner is a registered childminder you can claim vouchers for them to look after your own children. My wife is a registered childminder as it fits in well with looking after our kids. So now I can:

* claim vouchers for her to care for our children
* I pay the vouchers to her each month
* she pays me back the shortfall in my salary
* she keeps the balance i.e. the tax I have not had to pay

Not a lot of hassle really and certainly worth doing for £100 per month.

The only gotcha is that you have to be actively working as a childminder i.e. looking after at least one other child that is not a family member. Worth checking out though.

TheWaltons_3

Nice one... well done!!

Not often there are any loopholes people can get by with!!

Would be worth me becoming a childminder.. but with 3 under 2's of my own... I'd be demented!

Miss_Money

umm.. wouldnt that be classed as fraud?! im not comfortable with that idea myself..

Scarlett1

sounds like fraud to me aswell

seven-day-weekend

Why would it be fraud? He is paying the vouchers to a registered chilminder who IS minding children as well as his own.

Surely what she then does with her money is her business?

Scarlett1

seven-day-weekend wrote: »

Why would it be fraud? He is paying the vouchers to a registered chilminder who IS minding children as well as his own.

Surely what she then does with her money is her business?

maybe paying less tax to get childcare vouchers then paying them to yourself to look after your own child ?

I went to a childminding pre-registration a few weeks back and someone asked if they can claim the vouchers to look after their own children and she was told no, thats probably why the woman wanted to get registered.

dmg24

I don't know the legalities of it, but I would certain double check this information before acting on it! x

Miss_Money

seven-day-weekend wrote: »

Why would it be fraud? He is paying the vouchers to a registered chilminder who IS minding children as well as his own.

Surely what she then does with her money is her business?

but shes also the mother of the childrem she'd be also looking after.... and you dont get paid for looking after your own kids! If this were the case we'd all be joining as childminders... im sorry but i really dont like the look of it.
i think if you rang the tax credits line up and said "my wife is a childminder and im going to use our vouchers to pay to look after our children with her..." the answer would be a no.

Oldernotwiser

You can only use childcare vouchers to pay for care by a relative of the child if they are;
a. registered childminders
b. not providing care in the child's own home.

tipmeister

Having read through all of the documentation I could see no exclusion to prevent me from claiming in this way. I rang the helpline for the voucher provider and explained the situation in full. They confirmed that it is OK to claim as long as my wife is a registered childminder and is actively working as a childminder i.e. looking after other children too.

I have been open and up front about it and it seems like a genuine loophole in the system which I am more than happy to take advantage of.

Oldernotwiser

I think this covers it.

http://www.hmrc.gov.uk/manuals/eimanual/eim22030.htm

"Childcare that does not satisfy the conditions
Childcare does not satisfy the conditions for the exemptions if it is:

provided by the employee’s partner. (“Partner” means one of a married or unmarried couple and includes civil partners.)
provided in the child’s own home by a relative of the child. (“Relative” means a parent, grandparent, aunt or uncle, brother or sister (whether by blood, half-blood, marriage or affinity), and includes step-parents.)
provided in the home of the person who has parental responsibility for the child by a relative of the child (“relative” as defined above). "