Money Moral Dilemma: Should I pass on my salary sacrifice savings?

Former_MSE_Nick

This week's MoneySaver who wants advice asks...

My father-in-law helps out with our child's nursery school fees. However, I've been able to pay for some of them with childcare vouchers obtained through salary sacrifice, saving on tax and reducing the cost. Should I pass on the savings to him?

Unfortunately the MSE team can't always answer money moral dilemma questions as contributions are often emailed in or suggested in person. They are intended to be enjoyed as a point of debate and discussed at face value.

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gran3

Yes, of course. He's helped you out at full cost, don't rip him off!

Autumnella

Err... no! He's family. The salary sacrafice thing is to help you with childcare costs of which you still incur.

Oops, I misread. If he's paying towards your childcare at least offer the money to him.

Proxima_Centauri

Yes, it seems cheeky not to.

onlyroz

Not enough information, as usual. How much of the fees does he actually pay, and what is this in proportion to the total amount? Does he know about the voucher scheme and has he expressed an opinion about it?

Prothet_of_Doom

Effectively you are getting untaxed income which is to be used for child care, but which you use for something else and your father in law is giving you money which he has been taxed on, to help you live more comfortably.
Could you survive without his handouts?

I have adult children, not quite at the stage you are, and I would do anything to help them and their partners as long as they were not taking the !!!!. If you explained that you can get this tax free voucher, and that you really appreciate my help (how many hours does the father in law have to work to make the taxed income he donates to you ?) , I would still help out, and be pleased that you were being tax efficient.

If I thought you were !!!!ing it up the wall on pointless luxury, on wine and beer, and holidays. I'd perhaps revise the amounts.

But if you never told me and I found out I'd be bloody furious.

gettingtheresometime

For the love of things holy.

On the assumption that this is based on a real person's post the one why on earth wouldn't you pass on the savings.

In the assumption that this is a made up question is it generally assumed that the ethics of the population so low that the savings wouldn't be passed on.

scotsbob

Two of you were sharing the cost. Now the vouchers reduce the cost.


Surely you should both share the reduced costs.


Therefore you pass on the saving.


Put it another way. Your father in law is helping you out, surely you should be helping him.




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lewisdp

Will this be affected by the changes announced in the Autumn Statement about Salary Sacrifice schemes ?

PasturesNew

Yes, give him the money and explain why. If he chooses to give it back to you then that's OK, but if he finds out you've kept it he might feel miffed and all you'll get for Christmas is an old bottle of Brut he was given in 1978,

kazt2006

I'm going to go against the majority and say NO.

The saving over 12 months for basic rate tax payer is approx £933 per year if the full amount of vouchers are taken. That's less than £20 per week.

You could however take him out for a meal to say thank you.

You'll only have such high costs until term after which the youngest child is three due to the "Free Entitlement Grant". From Sept-17 the amount of free childcare is likely to rise from 15 to 30 hours too. I'm guessing you wouldn't be entitled to the 2 year old grant, as it is means tested.