Childcare Vouchers and Dividends

xj650t

Tax doesn't need to be Taxing :eek:

Resident in Scotland for tax purposes.

Scenario 1/
For the 2017/18 Tax year my Gross salary will be around £50K.
I plan to Salary Sacrifice to pension sufficient so that I fall below the higher rate tax threshold, due to be £43000 in Scotland. I'll then be able to take the full childcare voucher amount of £243pm, again via Salary Sacrifice.
My OH contracts through a Limited company and we are planning for the 2017/18 tax year that I will be gifted a number of shares, I expect the dividend payment from these shares to be under the £5000 tax free threshold allowed this year.
For this scenario does the fact I'll be getting a dividend payment under the tax free threshold make a difference to the amout of childcare vouchers that I can claim? Should I just be getting the £124 for higher rate tax payers?

Scenario 2/
For the 2018/19 Tax year my Gross salary will be around £50K.
I plan to Salary Sacrifice to pension sufficient so that I fall below the higher rate tax threshold, due to be £43000 in Scotland for 16/17, who knows if it'll be increased. I'll then be able to take the full childcare voucher amount of £243pm, again via Salary Sacrifice.
My OH contracts through a Limited company and I'll have the shares gifted the year before 17/18, I expect the dividend payment from these shares to be over the £2000 tax free threshold allowed for the 18/19 Tax year.
For this scenario does the fact I'll be getting a dividend payment over the tax free threshold make a difference to the amout of childcare vouchers that I can claim? Should I just be getting the £124 for higher rate tax payers? I realise in this scenario I'll need to complete self assesment and pay tax on dividends above £2000 threshold.

Happy to provide any other details.
Thanks for any help you can give.

Dazed_and_confused

There aren't really any "tax free" dividends in the sense I think you mean.

All dividends are still taxable however £5000 are currently taxed at a rate of 0%.

In the circumstances you outline receiving £5000 dividends would seem to put you over the higher rate threshold.

TheCyclingProgrammer

Dividends do not count as relevant income when calculating how much you are entitled to in childcare vouchers, so they will not be counted.

Your relevant earnings (which should be calculated by your employer when they do your basic earnings assessment) will include your basic pay, contractual bonuses (not performance-related bonuses), commission, overtime, benefits etc. A full list is here:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/368483/employer-qa.pdf

So long as your relevant earnings are below the higher rate threshold you'll be entitled to the maximum childcare voucher amount.