Childcare Vouchers

Poodle

Hi,

Does any one know if you have to buy these vouchers, ( i see some web sites offering this) or can they be as simple as something that a company prints themselves on word? If so does anyone have an example?

Also I understand the tax NI break for the employee and NI for the employer but is this a qualifying expense for CT purposes?

And can this be run for a close company with only hubby and wife employed where one claims the vouchers? or would both be able to claim to give double the allowance since one of the scheme rules is that it has to be made available to all employees?

Poodle

Baggybooks

I've never used 'vouchers', I just send a payment off to the childcare providers with a standard letter. Companies do offer to provide this service, but obviously take off their commission.

The childcare provider initially asked for vouchers, but after checking with HMRC, I went down the route which was easiest and cheapest for us to adminster.

Poodle

Thank you Baggybooks

But do you know the answer for this


And can this be run for a close company with only hubby and wife employed where one claims the vouchers? or would both be able to claim to give double the allowance since one of the scheme rules is that it has to be made available to all employees?


Poodle

Dean

Poodle, this should answer your question:

http://www.hmrc.gov.uk/childcare/childcarefactsheet.htm

Q. Is the £55 a week exemption available to every employee or is it limited to each family?

A. Every employee is entitled to the £55 a week exempt limit if the qualifying conditions are met.

Regards

Dean

Poodle

Thanks Dean.

Nice to have you back by the way.

Pooldle

Dean

Your welcome.

Haven't really been away - really busy with work at present, copule that with arranging my ACA training! Busy busy.

Hope you and everyone else is well?

Regards

Dean

Nilesh Mandvia

Childcare Voucher

In order to qualify for exempition, a salary sacrifice agreement needs to be signed. In order to successful of the scheme following two conditioin have to be met

1. The potential future remuneration must be given up before it is treated as received for tax or NICs purposes
2. The true construction of the revised contractual arrangement between employer and employee must be that the employee is entitled to lower cash remuneration and a benefit

Just a note that child care voucher/salary sacrifice are not included in the calculation of minimum wage. There for, employer needs to make sure that the gross pay employees receive is still above the relevant minimum wage.

You can do your own voucher or you can pay directly to child care provider But I do know who would be responsible to check whether child care provider is ofsted register. If you have just one provider then, just one deduction and a payment. But if you have more than one member in the scheme and all the members have their own child care provider (different), this would be very time consuming job at month end. My preference is to use a child care voucher provider.

Yes, husband and wife both are entitled to their child care voucher. I just did P11D, it suggest, that the company can pay more than allowed £243.00, if you do, rest have to go on P11D. Employees still makes savings on NI.

As this is salary sacrifice and it is an employment cost, so it is allowable for CT purpose.

Also it is advisable to encourage other employees to join the scheme as employers makes savings of 12.8%!!!

Nilesh

Poodle

Hi Nilesh

Thank you for your reply

Nilesh Mandvia wrote: »

Yes, husband and wife both are entitled to their child care voucher. I just did P11D, it suggest, that the company can pay more than allowed £243.00, if you do, rest have to go on P11D. Employees still makes savings on NI.

This is the part that really concerned me as there is only one child involved. Would this still apply? is there anything confirming this fact on HMR&C website or somewhere else?

They do not fall into the minimum wage as both are working directors and only incorporated 1st April so I was propsing to introduce a salary of £8290.00 for each director with £2860 (52 * £55) sacrificed. They pay the childcare anyway and by doing this they save a good amount of CT

At a recent P11d CPD with Mike Evans, he did not know if this was allowed hence my caution as it is probably not a common thing.

I also understand that they are able to 'save the vouchers up' for periods of more expensive child care. Do you know anything about this?

There are other emplyees and I am aware that the scheme would have to be made available to all employees.

Poodle

Nilesh Mandvia

Childcare voucher

Hi Poodle

Have a look at the following leaflet, which should clear all your doubts.

http://www.hmrc.gov.uk/leaflets/ir115.pdf

Nilesh

Poodle

Thank you Nilesh, just wha I needed

Poodle

Rasmita

Childcare Voucher

Our organisation which is international company uses a company called Accor for provision of Childcare vouchers.They do charge £22.50 service fee per month.

Nilesh Mandvia

Rasmita

You did not mentioned the total value of the voucher or how many employees are in the scheme. I have a company called Allsave, we pay them 4% of voucher value as their service fees. If your voucher value is less than £562.50 a month, then your voucher provider is expensive!

Rasmita

Nilesh Mandvia wrote: »

Rasmita

You did not mentioned the total value of the voucher or how many employees are in the scheme. I have a company called Allsave, we pay them 4% of voucher value as their service fees. If your voucher value is less than £562.50 a month, then your voucher provider is expensive!

The value of the voucher is £542 and there are 3 employees. So you have got a better deal with Allsave.
Thank you Nilesh