Childcare Vouchers or Tax Credits?

JWalkden

I've recently become a single parent and I'm becoming more an more confused,

I enrolled on my employers childcare vouchers scheme but have since discovered this means I not eligible for the childcare element of WTC/CTC.

I'm getting more an more confused trying to work out which is best to use and whether I should lower the number of hours I currently work (it that will give me other benefits).

Can anyone give any advice or is there an organisation I can call which can run through this stuff to help me get organised?

Thanks

Darksparkle

Does the childcare vouchers cover your full childcare costs?

There's plenty of tax credit calculators online such as entitled to and turn2us

JWalkden

I'm able to sacrifice the full amount from my wages each month, yes (I hope this is what you mean).

I understand this means I effectively dont pay NI/Tax on this sum, but Im not sure how to see realistically what effect this would have on my wages if I stopped using childcare vouchers and instead claimed the Childcare element of Tax Credits - which I dont think I can do with a benefits calculator.

Darksparkle

No I mean are your childcare costs more than the vouchers you receive? Example your childcare is £500 but your vouchers are £243.

A salary calculator would tell you your income with and without vouchers. You'd then use these figure with and without childcare on the tax credit calculators.

JWalkden

No childcare and vouchers are the same value (childcare is £642.00 and this is how much is deducted from my salary each month before NI & tax).

Salary calculator is a good shout! thank you

victoriaolivia

Is there not a capped on how much can be taken in vouchers. I thought it was 200 and something. Things might have changed since I looked into tho

JWalkden

I believe there is a cap on the new government 'tax-free childcare' but I enrolled on childcare vouchers earlier this year through my employer before it closed down on 4th October 2018.

Darksparkle

JWalkden wrote: »

No childcare and vouchers are the same value (childcare is £642.00 and this is how much is deducted from my salary each month before NI & tax).

Salary calculator is a good shout! thank you

That's unusual. You can only save tax/ni on £243 per month if a basic rate taxpayer.

Is your employer giving relief on the full £642?

Paparika

Darksparkle wrote: »

That's unusual. You can only save tax/ni on £243 per month if a basic rate taxpayer.

Is your employer giving relief on the full £642?

depending on the employer, some allow £243 pre tax and an amount post tax, they won't get the allowance on post, but some parents have the option to pay all the childcare costs in vouchers.

There is no benefit to gain from it, apart from paying all childcare with vouchers rather than the rest from their bank.

Aka one payment done

Darksparkle

Paparika wrote: »

depending on the employer, some allow £243 pre tax and an amount post tax, they won't get the allowance on post, but some parents have the option to pay all the childcare costs in vouchers.

There is no benefit to gain from it, apart from paying all childcare with vouchers rather than the rest from their bank.

Aka one payment done

Yes but the OP has said the full amount is deducted before tax/nic.

Paparika

Darksparkle wrote: »

Yes but the OP has said the full amount is deducted before tax/nic.

aha so they did, well that's impossible, unless it's backdated vouchers over a set of months.