Nursery fees - Tax Credits or Salary Sacrifice Vouchers?

london80s

Hello, I have just started a job where I am entitled to vouchers for my son's childcare costs from my employer.

I spoke to Tax Credits and they said I may be better off NOT using the Salary Sacrifice.

Our current nursery costs are £650pm. I am taking £220pm out of my wages for the scheme and we are paying the other £440pm out of our wages.

Does anyone know if we would be better off just carrying on without the vouchers and instead claiming Tax Credits? I hope this is easy to understand as I am starting to confuse myself!

lindsaygalaxy

What is your/ your partners income?

london80s

At the moment it is about £32,000. (It will probably be more with overtime/bonus but that is the set figure). It is not alot when working and living in London but we have both just started new jobs basically working from the bottom but with the chance to progress, which I personally had to do. I have taken quite a big drop but I had just got stale at my last job. Hopefully this time next year I/we will be on more but that is just a what if really.

Looking at the calculators online it seems we wouldn't receive any Childcare costs if I continue with the scheme whereas we would get around £150pm if I opt out of the Salary Sacrifice. Does this sound right to you?

So obviously we would be better off if we just stick to Tax Creds. I hate getting any benefit at all to be honest but as we have a mortgage, nursery costs and large travel expenses etc we just need that little bit extra to go towards the littlun's Nursery fees.

I know lots of people are in the same boat or worse but I don't want to come across as a 'taker' or anything!

Thanks for reading

lindsaygalaxy

If you and your partner can both get vouchers from your work then you would each save about £70 a month - around £140 (if you get the full £247 each).

london80s

Her conpany don't do the vouchers which is a shame. But thanks for the advice