Childcare Vouchers & tax code

Kallyrich

Hi I wonder if anyone could help?


I have been claiming childcare vouchers through my employers salary sacrifice scheme since November 2015. In November 2015 my tax code was 947L NONCUM (due to the fact I was on Maternity Leave).
As of today my tax code has now changed to 721L CUMUL.
I have contacted HMRC and they tell me that my payroll department have informed them that I am receiving £2916 of staff benefits this financial year (which is the overall cost of the childcare vouchers) and I have been taxed on that and this is why my personal allowance has gone down.


I don't understand if this is correct? I am now having more deductions from my salary than I have ever had and that is on top of the £243 taken from my pay. Surely I am supposed to benefit from this? Online calculators tell me I should be saving £77 a month but I am paying more tax than ever.


Please could someone tell me whether this is wrong?

CBN

Childcare vouchers (from a recognised provider) are non-taxable benefits and your employer has made a mistake.

Darksparkle

Are you a basic rate taxpayer?

Kallyrich

Yes I am a basic rate taxpayer.

Darksparkle

Have you asked your employer why they are reporting it as a taxable benefit when it isn't one?

Kallyrich

Unfortunately talking to my payroll department is like talking to a brick wall. Finding a member of staff who knows what they are talking about is difficult.
I have contacted HMRC back following this and they have changed my tax code back but have also informed me that if my employer reports the same information again that I could face paying it all back. I am almost certain that it is incorrect so have asked them to go ahead and will persevere with my payroll dept. I thought the whole incentive of salary sacrifice was so that you didn't have to pay tax/NI on it but I am being taxed the same as I would be if it wasn't coming out & my personal allowance has been affected on top of that.

xylophone

https://www.gov.uk/government/publications/e18-how-can-you-help-your-employees-with-childcare

Does the Payroll Clerk have a copy?

Kallyrich

Just to inform that this has all been resolved.
My payroll department were at fault and HMRC have altered my personal allowance back to the 1100L it should have been. Thank you for your help.