Childcare vouchers question - lower/higher rate taxpayer

LannieDuck

I'm trying to calculate how much of my salary per month I'm allowed to sacrifice into childcare vouchers. My question is do they work out whether you're a higher/lower rate tax payer before or after your salary sacrifice?

Basic rate taxpayers can sacrifice £243/mth, while higher rate taxpayers can sacrifice £124/mth.

I'm a higher rate taxpayer before the salary sacrifice, but I'll be a lower rate taxpayer if I'm allowed to sacrifice £243/mth.

I've tried googling, but it's not an easy question to find an answer to. Many thanks for any help.

zagfles

See http://www.hmrc.gov.uk/thelibrary/employer-qa.pdf
(The employer's guides are usually where the useful info is).

LannieDuck

"I provide my childcare scheme through salary sacrifice arrangements –
what salary figure do I use?

You should use the post-sacrifice figure. Where an employee agrees to enter into a salary sacrifice arrangement, the level of earnings for the basic earnings assessment is always reduced. The amount sacrificed is not salary and therefore should never be added into the calculation for the basic earnings assessment."

Perfect, thank you. I'd been looking through resources for employees. Will bookmark that link - it's really useful.