Childcare vouchers

Jenni's_Pennies

I've just had my first child and am looking at going back to work and would like to know whether anybody uses Childcare vouchers? I understand that you can request to have up to £50 a week of your salary paid as childcare vouchers, the advantage being that they are income tax and national insurance free. Does anybody know the ins and out of using the vouchers or have any advice for me?

Thanks,

Jenni's_Pennies - (Mum to Joseph otherwise known as munchkin, tinkle or pumpkin.)

Mado

Congrats!

Desperately trying to get my company to start them.
You are right, it is up to £50 a week exempt of tax and Ni contribution (which means the company also saves money on the NI bit).
Yuo can only use them with registered child-care, ie nursery, child-minders pre-school who wil have Ofsted inspections or registered nannies. There is a link you can find on Surestart to find out who can be registered (can't remeber exactly but google it and you should find it!).
As far as I can see, it is as good as it gets, but I am not sure if it has any effect on your entitlement to Child Tax credit (Don't qualify for it).

Good luck with your childcare selection. always a bit daunting to find the right people to leave your preciuos bundle with!

Alleycat

Hi,

We use Busy Bees vouchers and you have to a) make sure your employers are registered with the scheme and b) make sure the childcare provider you choose is also registered to accept these vouchers. If your employer and/or childcare provider do not accept the vouchers then you can request a pack for them to complete to register. You should discuss the fact that you are hoping to use vouchers with someone in HR as they would be best suited to advise.

One of the good things about the childcare voucher scheme is that if your childcare costs are more than £50 per week, you can in theory claim up to £50 yourself and then get your OH to do the same with his company (as long as they are both registered with the scheme).

Tbh, it is a bit of a faff (well so far for me anyhow!) as you need to complete an order form before the cut off date, send it to the provider i.e. Busy Bees, who then invoice your payroll, payroll deduct the amount off your wage before NI and Tax are deducted, send payment to Busy Bees, then Busy Bees issue you with your voucher for the pay period specified which you give to your childcarer, who then contact Busy Bees (I think) to get the voucher redeemed. I have had some problems in the first few months of using them as initially I missed the cut off date as Busy Bees gave me the wrong information. They then said that they didn't know when the cut off dates for getting the form to them as my employers had not supplied it. When I queried this with my HR they said they had given them the info (etc, etc) . So unfortunately the first month, I had to pay cash, but for last month I got the voucher in time (just) after a lot of peeing around. I have now completed a form to run for 6 months so I don't have to keep submitting a new form each month. I am now awaiting my second voucher with baited breath!

It is a great idea and does save you money definately and hopefully things will have smoothed out now. If you need further information there is a website, I think https://www.busybees.co.uk or just google Busy Bees or Childcare vouchers.

Congratulations on the birth of Joseph, hope everything is going well!

Alley

P.S. Mines called Jessica and is the grand old age of 8 months now!! Ooh and she crawled forwards for the first time today and stood up in the bath last night :j ! How proud am I?!

frostyspice

I used this scheme when I went back to work in 2003 when my first child was six months old. It worked very well for us (until I had to leave to have number 2!!) The idea is that an amount of money you nominate for your childcare costs in the following month is deducted by your payroll people at work BEFORE tax and NI are applied to your earnings. So you are taxed on a smaller amount than you normally would be. You are sent a voucher for that amount which you then give to your childcare providers.

Both your nursery (or other childcare provider) and employer have to have signed up with the Inland Revenue (now HMRC) to administer the scheme. It is in both their interests to be part of it. The nurseries like it because they are more likely to get their money (even doting parents apparently need chasing for money!) and the employers like it because they have to pay less NI too.

When I did it, it was administered by these people: https://www.busybees.com and they are very helpful on the phone (it's a free 0800 number). You don't even have to put your child in one of their nurseries.

There are things to warn you about - usually your nursery will want fees in advance, so the first month you will probably have to stump up a cheque which isn't out of your salary. Also, beware of paying relatives etc for childcare in this way unless they are willing to declare it to HMRC or they may find themselves getting a visit from the taxman.

I also didn't save as much money as I could have because I failed to spot a loophole which I think was something to do with maternity pay, but I can't remember what this was!! I will ask my husband and write more if I do remember. I think the fact that my actual take-home pay was less, adversely affected the amount of maternity pay I was eligible for in my second pregnancy, and this could have been avoided by not asking for childcare vouchers for a particular month, but you would have needed a mind like a steel trap to have seen that one coming (especially while pregnant).

All in all it is a great moneysaving scheme and is actually less complicated than it sounds, but you do need to be organised. You need to remember to fill in a form requesting the right amount and submit it by a certain date each month. I kept a note of everything on my PC and also kept photocopies of the forms.

If you earn more than a certain amount (£32k p.a.?) then you won't be eligible and there is a lower limit too, but these thresholds have changed since 2003 and are worth checking.

I was paying approximately £650 a month in nursery fees and I worked out that by using this scheme we would have saved this amount over the year, so effectively, one free month per year - not to be sniffed at, as my childcare costs were nearly half my earnings.

I don't work at all now and consequently have no money to speak of, which is why I frequent these boards!

Hope this helps

Savvy_Sue

Do a search for 'salary sacrifice' on this board and I think you will find posts outlining the pitfalls. I think basically it lowers your gross salary, so has an adverse effect on anything which is calculated on that, eg redundancy payments, pension calculations etc. just off the top of my head, and I've never used the scheme, just thinking aloud really ...

katskorner

We use childcare vouchers through my husband's company. It is managed by a company called Care-4 and I can do everything online, including send payments to a designated childminder. She gives me an invoice each week and I go online and send the money direct to her bank account, get given a reference number that is texted to her and that is it.

Once it was set up - which took a month from the time we applied - it has been easy. It is saving me a good 40% on childcare each month. We take the full benefit of £217 and it costs us around £110 in salary sacrifice. (Our added bonus is that my husband's company top the vouchers up by 10% so it works out even cheaper than the government allowances).

Woby_Tide

Savvy_Sue wrote:

Do a search for 'salary sacrifice' on this board and I think you will find posts outlining the pitfalls. I think basically it lowers your gross salary, so has an adverse effect on anything which is calculated on that, eg redundancy payments, pension calculations etc. just off the top of my head, and I've never used the scheme, just thinking aloud really ...

Our company has just started offering the salary sacrifice via care-4 for the childcare stuff. At the same time they have done various changes to pensions aswell to change how we pay contributions. Regardless of it all though they have stated and provided a written letter detailing that you will always have a 'reference salary' which is your salary without taking any sacrifices into account this will be used for redundancy, pension conts, mortgage applications, life insuarnce payouts etc., your payslip however will only refer to post sacrifice figures(which technically makes it better when claiming fro WTC/CTC from what I can tell)

Pugwash_2

Jenni's_Pennies wrote:

I've just had my first child and am looking at going back to work and would like to know whether anybody uses Childcare vouchers? I understand that you can request to have up to £50 a week of your salary paid as childcare vouchers, the advantage being that they are income tax and national insurance free. Does anybody know the ins and out of using the vouchers or have any advice for me?

Thanks,

Jenni's_Pennies - (Mum to Joseph otherwise known as munchkin, tinkle or pumpkin.)

Hi I work for the NHS and they have started using the new voucher scheme for employees. It sounds a great scheme and I could really see the benefits. Unfortunately I was not able to take advantage of the scheme as before subscribing I checked with all the registered childcare providers I use and NONE of them used them or wanted to use them! In other words I'm glad I checked before signing up so would advise others to do the same. Bit of a shame really. The main reason for their refusal seemed to be they wanted money (cheque or cash) in their hands as it were rather than in voucher-form which is surprising when one provider was a well established leisure centre offering day-camps! Hopefully others have had more luck than me!