Child care vouchers have a I got my figures right?

hyposmurf

Both working parents, one works 37.5 hrs at £30500(this is figure after salary sacrifice for pension), other works 30hr week at £11563.

Childcare costs we've estimated at £510 month for 30hrs week required.

So as basic rate tax payers if we both claim child care vouchers we can claim £243 a month each.
So £243x0.7(tax and NI saving)= £170
£243-£170=£73x2= £146 saving via child care vouchers

£510-£146=£364 child care costs

ELOUISE

You can check your figures with Computershare childcare vouchers tax savings calculator here:


myaccount.computersharevoucherservices.com/Parent/EligibilityCalculator.aspx

Hope it helps (sorry I am a "newbie" cannot post links)

hyposmurf

Thanks for providing the link i've looked a few of those online calculators but I end up with more questions than before,regarding what they have an haven't allowed for.

Such as I already sacrifice some pay for pension, does that change things?Should I be including for my salary before the salary sacrifice?The calculator at that link doesn't include for combined income.
Will I automatically be able to claim up to £243 a month of vouchers if my salary is at basic rate?

zagfles

On an £11563 salary you're only paying tax on £1563 (after £10k personal allowance taken off). So sacrificing more than £1563 a year won't save you any tax.

zagfles

hyposmurf wrote: »

Thanks for providing the link i've looked a few of those online calculators but I end up with more questions than before,regarding what they have an haven't allowed for.

Such as I already sacrifice some pay for pension, does that change things?

No, use salary after pension sacrifice

Should I be including for my salary before the salary sacrifice?The calculator at that link doesn't include for combined income.
Will I automatically be able to claim up to £243 a month of vouchers if my salary is at basic rate?

Yes as long as it's always been basic rate (your employer has to do an income assessment at some point, can't remember when, and if at that point you are a higher rate tax payer you get a lower allowance for vouchers - it's stupidly complicated pointless rubbish but there it is).

hyposmurf

zagfles wrote: »

On an £11563 salary you're only paying tax on £1563 (after £10k personal allowance taken off). So sacrificing more than £1563 a year won't save you any tax.

So would it be worth going down the tax credit route instead of child care vouchers?
I agree it is stupidly complicated!Can you mix and match?

zagfles

hyposmurf wrote: »

So would it be worth going down the tax credit route instead of child care vouchers?
I agree it is stupidly complicated!Can you mix and match?

Yes, but you have to deduct anything you get in vouchers from the amount you claim through tax credits.

Working out the best option requires more computing power than is available on the planet - seriously it's ridiculously complicated because of the interaction with tax credits disregards.

HMRC have a calculator https://www.gov.uk/childcare-vouchers-better-off-calculator but as I remember it only tells you what the best option is now - in terms of this year's income - that won't necessarily be the best option long term.