Childcare Vouchers: cut childcare costs by £1,000/year Discussion Area

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  • onlyroz
    onlyroz Posts: 17,661 Forumite
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    Kira000 wrote: »
    I have a quick question. My DD is now coming on 6m and due to start at a nursery when i go back to work. I am considering joining our company SS Voucher scheme, but reading the blurb, they say if you go on mat leave again, your Mat pay is based on the reduced amount after the SS, which i understand. But, they also say you dont accrue any vouchers while you are off, as your pay isnt high enough to make deductions. This doesnt quite make sense to me, as it seems win win for them. Surely its either lower MP, and they still pay the vouchers (as i'm taking the hit for them), or full MP, and no vouchers. or am i being a bit thick? Anyone?
    If you go on mat leave for a second time, and your salary (above SMP) isn't enough to cover the vouchers, then the company has to pay the vouchers on your behalf.
  • Kira000
    Kira000 Posts: 1,983 Forumite
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    onlyroz wrote: »
    If you go on mat leave for a second time, and your salary (above SMP) isn't enough to cover the vouchers, then the company has to pay the vouchers on your behalf.

    Thanks Onlyroz, do you know where i can find anything official that says that? Our corporate policy is very clear saying no vouchers paid.
    Thanks very much
    Married 13/03/10 #1 DD born 13/01/12!!

    ;)Newborn Thread Founder ;)
  • CL
    CL Posts: 1,537 Forumite
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    onlyroz wrote: »
    If you go on mat leave for a second time, and your salary (above SMP) isn't enough to cover the vouchers, then the company has to pay the vouchers on your behalf.

    I'm in this situation now and tried researching this as I had heard conflicting opinions. What I read about it said employers can make deductions from SMP:

    SMP is replacement of earnings, not a benefit, so any deductions which the employer would normally lawfully make from wages can also be made from SMP.

    http://www.hmrc.gov.uk/manuals/spmmanual/spm21025.htm

    The link below also seems to say that if your contract of employment says you are entitled to Childcare Vouchers as a non-cash benefit, then your employer must keep supplying them, but I understood that this meant if your employer gave them on top of salary and not as a salary sacrifice arrangement.

    http://www.hmrc.gov.uk/employers/sml-salary-sacrifice.pdf

    Please someone explain this to me if I've got it wrong.
  • rpc
    rpc Posts: 2,353 Forumite
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    Vouchers are deductions from wages, salary sacrifice is not. For most purposes, your salary is the post-sacrifice one as far as anyone is concerned. There are no 'deductions' in a salary sacrifice arrangement. The only thing that my reference salary (i.e. pre-sacrifice) is used for that I can think of is my final salary pension.

    Your employer may not sacrifice SMP to provide your vouchers, but if you receive contractual maternity benefits in excess of SMP then money can be taken from these as long as you always receive at least SMP.

    As per the HMRC note, it would be illegal for your employer to stop providing vouchers while you are on leave. If you only receive SMP, your employer must foot the bill for your vouchers. Over a long period, the savings in employers NI outweigh the cost of providing vouchers on maternity leave.
  • onlyroz
    onlyroz Posts: 17,661 Forumite
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    CL wrote: »
    I'm in this situation now and tried researching this as I had heard conflicting opinions. What I read about it said employers can make deductions from SMP:

    SMP is replacement of earnings, not a benefit, so any deductions which the employer would normally lawfully make from wages can also be made from SMP.

    http://www.hmrc.gov.uk/manuals/spmmanual/spm21025.htm

    The link below also seems to say that if your contract of employment says you are entitled to Childcare Vouchers as a non-cash benefit, then your employer must keep supplying them, but I understood that this meant if your employer gave them on top of salary and not as a salary sacrifice arrangement.

    http://www.hmrc.gov.uk/employers/sml-salary-sacrifice.pdf

    Please someone explain this to me if I've got it wrong.
    I think the quote is referring to things like pensions and possibly student loans. I know that my employer continued to pay my vouchers while I was solely on SMP, and they said that they were obliged to do so.
  • onlyroz
    onlyroz Posts: 17,661 Forumite
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    edited 1 July 2012 at 10:48PM
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    Useful article here:

    http://www.personneltoday.com/articles/2009/06/10/51018/childcare-vouchers-and-maternity-leave.html

    And here:

    http://www.hmrc.gov.uk/employers/sml-salary-sacrifice.pdf
  • emeraldbugle
    emeraldbugle Posts: 1,063 Forumite
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    Please sign, the amount hasn't changed since 2006.

    https://submissions.epetitions.direct.gov.uk/petitions/31669
  • thefair1973
    thefair1973 Posts: 32 Forumite
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    I've recently changed jobs and unfortunately fell foul of the reduced rate for new entrants to a scheme, even though I'd previously been in a scheme for 4 years :(

    However, it appears that my old employer still paid me my full allowance of childcare vouchers, as well as my new employer paying the full reduced amount. I've got two questions really:
    1. How do I stand with the old employer if they continue to pay the vouchers - would I have to pay them back and how would that work?
    2. How do I stand tax-wise receiving more than the maximum limit per month?

    Thanks.
  • bunyip
    bunyip Posts: 1 Newbie
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    Hi

    Im new to the childcare scheme and am struggling to get an answer to a question from my employer -

    I have returned from maternity leave and whilst previously I was a full time basic rate tax payer I have returned on part time hours. I set the scheme up with my employer as apposed to my partner who is also a basic rate tax payer but on a full time basis. As my income is now considerably lower obv my tax is much lower and when I have checked my payslip for the childcare scheme it doesnt seem to have given me much net benefit? My question is should we have set this up from my partners employer or as we are both basic rate tax payers does it not make any difference?

    Thanks
  • rpc
    rpc Posts: 2,353 Forumite
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    thefair1973 wrote: »
    1. How do I stand with the old employer if they continue to pay the vouchers - would I have to pay them back and how would that work?
    You will probably have to repay the employer, it is possible to 'refund' vouchers.
    2. How do I stand tax-wise receiving more than the maximum limit per month?
    That depends on how it is fixed. If the vouchers are taken back, all is OK. If not, you will owe tax and NI on the excess amount.
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