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

onlyroz

lewisdp wrote: »

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

I don't think so. Pensions and childcare where exempt from the salary sacrifice changes. (At least I hope so because I've been claiming childcare vouchers for nearly 12 years now and will continue to do so for another 4 if I'm allowed).

http://www.moneyobserver.com/news/23-11-2016/autumn-statement-2016-salary-sacrifice-perks-curbed-pensions-exempt

jonnibgood

If the childcare costs aren't fully paid up by the fil then definitely worth taking advantage of the tax and NIC savings which you can get by taking part in a salary sacrifice scheme. It's a no brainer. You'll most likely save basic rate tax at 20% and then 12% NIC or 2% NIC dependent on your earnings.

It definitely helps to make the money go further for childcare costs.

But, you'll need to enrol before April 2017 after which time childcare voucher schemes are due to close to all new joiners (to be replaced by the so-called tax free childcare scheme which doesn't require any employer involvement, set up by individuals only) and only provides (effectively) basic rate tax relief via a 20‰ top up, ie you don't get the NIC relief too. There are more stringent qualification conditions for these accounts which are worth checking out including a requirement for both parents to be in work (can inc self employment) where there are 2 parents in the frame depending on circumstances etc.

If you're in a childcare voucher scheme before April 2017, the schemes can run until April 2018 at which point they're closing to everyone and the tax free childcare scheme is the only option.

If it's a moral dilemma that you're canvassing opinion on, for me it would depend upon what the fil said when he offered to help with the costs, was it a hardship related offer or just a supporting his grandchild related offer? Was it an affordability issue of the parent or a gesture of goodwill and support for the child?

Marvel1

Your child you should pay.

MeanJean

Speaking as a grandparent I suggest that you tell the grandparent about your vouchers and what you will save, tell him what the saved money has been used for, and then ask if he wants to reduce his contribution. If he is financially comfortable and knows that the saved money will go towards your household bills and the children he will probably say that you should keep the saving. If he is experiencing hardship then your offer may be accepted, but you will be helping a loved member of your family and that is a good thing to do. I am happy to help my children but would be miffed if I was kept in the dark and then found out they were spending the money on partying or nice holidays while I was skimping and saving thinking they were in need. Be open and honest. Hope this helps

Kim_kim

kazt2006 wrote: »

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.

That's a lot of money over a year/month!

Only £20 a week......

crmism

The question you need to ask yourself is - who's is the child? Yours, or your in-laws'?

When you decide to have children, you must accept the baggage that comes with them, and that includes the costs of raising them. If you are finding it difficult to do this without assistance, you need to think very carefully whether you should give up your job and look after your child yourself. After all, that's what parents are for.:cool:

tulips

lewisdp wrote: »

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

Was there something in there about lack of morals?

determined_new_ms

I think you should have the conversation with him. He clearly wants to support you so I would assume if he doesn't need it he'll tell you to keep the savings but if he is struggling himself then it will help him. If it was my dd this is what I would want to happen, but the reality being if it didn't matter to us I would just be glad to have had an honest conversation, appreciate the thought and tell her to keep the savings

Floss

If your FiL pays you the full amount for the fees, then yes,you should return the benefit you gain by using the salary sacrifice scheme to pay the whole cost.

If your FiL pays a proportion of the costs, and you are claiming for the balance, then no, as the benefit is gained only on the amount you are paying.

Either way, you should have a conversation and tell him you are taking advantage of a legal tax avoidance scheme out of courtesy and his financial involvement.

alittlemadam

So your happy for your FIL to pay a share of the cost of the nursery fees but you are NOT prepared to share your childcare vouchers with him, why not just ask him to pay the full cost of the nursery care or better still as him to give up his job and look after your child instead, then you'll be quids in to spend on yourself


if it wasn't for your FIL you would either have to pay the full cost of possibly give up your job so yes share the vouchers