Tax credits and childcare vouchers

noviceanne

I exchange £243 per month of my salary for childcare vouchers. I exchange them for part of the cost of childcare and don't pay tax or NI on that amount.

I understood that I should deduct this amount from my total salary on my annual declaration. (I didn't do this last year and wrote to rectify the matter, or so I thought)

This month I updated my childcare costs and am reminded that I have been overpaid by almost £3000 so I phoned for an explanation as I have always provided the required information in a timely manner, I don't undersatnd why this should have happened.

I was told that the guidance re salary sacrifice schemes for childcare vouchers requires me to send the following information to a specialist team for assessment
contract variation form
payslips from before and after joining the scheme
Agreement between employer and benefit provider
Booklets about the schem

Has anyone else been asked for all this?

[Deleted User]

Have you been claiming the costs through Tax Credits?

You cannot have a tax break on the vouchers (which also means you do not have to declare the amount you spend on them on your declaration) AND claim for help towards the costs through WTC.

If you have been doing this, this will be the reason why you have been overpaid.

noviceanne

No , I have told them that I get them. But there is nothing on the declaration forms that asks for this information and every advisor I speak to gives different information the latest being thatI need to jump through yet more hoops. Where do I find out the facts?

[Deleted User]

You can tell them you get vouchers and still claim for the costs that the vouchers dont cover.
It seems as though you could have been claiming the full costs of the childcare and not deducted the amount from what you pay in vouchers. TCO have realised this and are asking you to pay it back.

Have a look at this:
http://www.hmrc.gov.uk/forms/tc600_notes.pdf

Page 21 states -

Do not include

• any amounts paid by your employer (whether in money or
vouchers)
• the value of any child care vouchers you receive

• any amount paid by a local education authority towards

noviceanne

I've just done calculations on entitledto.com and appear to be worse off because I get childcare vouchers!

How accurate is entitledto.com and does anyone know where I can get accurate advice or the guidance the tax credit dept use to advise on childcare vouchers?

This is driving me to despair!

Thanks

Gemmzie

Some people are worse off with the vouchers, Martin did a feature on it, will try and find it and post the link for you.

Here you go...
http://www.moneysavingexpert.com/health/childcare-vouchers

woohoo

Oh no. I think this applies to me as well. I stupidly never realised you had to tell them? What should I do - will I have to pay a lot of money back? How can I work out how much that would be???? Oh No!!

noviceanne

I think you have all helped me get this straight, but don't think I will jump through the final hoop of writing to the specialist team! ... unless any of you experts think it is essential.

woohoo

Hi,
just bumping regarding my question a couple of posts up...........I'm losing sleep!
Can anyone tell me how much I might have to repay? I get the £243 voucher every month but childcare costs are about £120 per week? I didn't realise I had to tell then about the vouchers
I would love some advice,
thanks

DaisyFlower

Woohoo, you're best phoning them and telling them asap. The sooner you sort it out the better. If they have been giving you 80% of your childcare costs and you didnt declare the vouchers you'll owe them back the extra they paid you on the £243 element. Depends on how long you have been claiming as to how much that works out at.

woohoo

Hi,
I think I had better ring them then Daisyflower..!
Is there a formula I can use to estimate the amount I may have been overpaid? I get £280 a month from tax credits towards £120 a week childcare? How will they work it out - can anyone give me any idea? Will it be thousands? Oh NO!!! I am too scared to ring them - I don't know how I can pay it back? I never meant not to tell them - If they had ever asked I would have said......! Will they tell me on the phone or will I have to wait for a letter?
Sorry to ramble...........