Child care voucher refund: Is this allowed?

incubus1980

Hi,

Both myself and wife have been using the maximum tax free amount we are allowed to claim for childcare vouchers. The amount we claim has always fallen short of what it actually costs us so we had usually been topping up to cover the actual cost.

When our kids reached 3 the council also paid a contribution towards the cost. I've not had to make a voluntary payment for a while as there was a surplus in the account of about £2000 from us overpaying, council funds and childcare vouchers. The nursery have now told us they want to pay this back into our bank account as they don't like us to have such a high credit in our account.

My question is, do I have to tell the HMRC about this as some of this money might have come from tax free vouchers. I could argue that the vouchers didn't cover the cost of childcare so they were used up first and the other money was made up from my overpayments and hence tax was already paid on it. What I don't want to happen is for me to receive this money and then 6 months down the line receive a letter telling me I owe them tax. They wouldn't know from me that this had happened but i'm guessing the nursery would be filing their accounts that would show this payment to me.

Regards,

John.

Icequeen99

Have a look here: http://www.hmrc.gov.uk/leaflets/ir115.pdf (Page 4)

This covers the situation of unused vouchers, but does not seem to cover what you do if the vouchers have been taken by the nursery. I would have thought the nursery should return the vouchers and that you should then give them to your employer.

There is a similar question being asked here: http://eyfs.info/forums/topic/33764-refund-childcare-vouchers/ Seems to suggest payment should go back to the voucher company. Maybe you should contact your voucher company?

IQ

incubus1980

Icequeen99, thanks for the reply and links. It would certainly suggest what the nursery wants to do is not allowed. I think what i might do is just suggest to them that they hang onto the money and I'll stop the vouchers coming out of my wages for a few months until the surplus drops and then start it up again.

Thanks,

John.