|
Childcare Vouchers is a scheme some employers offer to help working parents save on registered childcare costs. Childcare vouchers are available to all working parents whose companies operate childcare voucher schemes. The vouchers can be used to pay for all types of registered childcare including , day nurseries and out of school hours clubs and the value is tax and NI exempt.
How it works :
- In addition to salary
This pays an amount on top of your existing salary. It is the most beneficial to you, as you benefit from the employers’ subsidy, as well as the tax and NICs exemptions. This costs more to the employer.
2. Salary sacrifice
This is where an employee gives up salary in exchange for the employer contributing an equivalent amount to a childcare place or a childcare voucher.
- Using employer provided childcare vouchers to pay towards your childcare costs allows Tax and NI savings.
- For 2007/8 the Tax and NI free allowance is £55 per week, or £243.00 per month, per parent.
- Savings for the 2007/8 tax year of up to £1195.56 per year per parent can be made.
- Gable House Nursery accepts all childcare vouchers. If your employer doesn’t operate a scheme, ask them if they will.
Your entitlement to tax credits, however, is likely to be affected. This is because you can only claim help through the childcare element of Working Tax Credit on childcare costs that you meet yourself. If your employer meets any of your childcare costs, even if your pay has reduced in return (a salary sacrifice) these costs do not count.
CLick HERE for information on a typical voucher scheme.
|
