Child Care Vouchers

Name: Sean

Hi,

A couple of us want to set up this scheme at work but we don't want to use an agency to do it for us as we are only a small company.

We understand how it works, however, we are not sure what the bookkeeping entries would be. We are probably over complicating it! Can anyone help?

Thanks in advance.

Sean

cobbles

Sean the bookkeeping entries if you were using an agency (without accounting for the additional service charge) would be DR Gross Wages CR Supplier, payment DR Supplier CR Bank, however as you are not using an agency the entries would be DR Gross Wages CR Bank

blobbyh

The cost of using a proper childcare agency isn't actually that great. We currently pay a 2.5% monthly admin fee for every £243.00 of vouchers bought - £6.07 - so quite neglible in the big scheme of total business related costs and at least it'll be done properly.

What have you been quoted?

Claire321

blobbyh wrote: »

The cost of using a proper childcare agency isn't actually that great. We currently pay a 2.5% monthly admin fee for every £243.00 of vouchers bought - £6.07 - so quite neglible in the big scheme of total business related costs and at least it'll be done properly.

What have you been quoted?

We also operate a scheme but don't seem to have such a good deal as we are charged 6% of the voucher values!

zara5034

I Didn't think you could administor a scheme without an agent, but then I could be wrong.

I looked into ACCOR services and thier admin fee was 7%, I seem to remember that Busy Bees were about 6%

Either way, you save on your Ers NI, Did I hear that the scheme was going to be axed?

deanshepherd

You can administer your own scheme. HMRC even provide you with a draft voucher on their website that you can use. However, getting a nursery to actually accept your vouchers is another matter entirely..

Toffeemadblue

We pay 6.5% admin fee to SODEXHO Pass Ltd, so it sounds like Robert had a really good deal.
Somewhat off topic but I only realised recently that salary sacrifices like child care vouchers must continue to be paid even when the employees wage drops below the rate of the value of the vouchers, for instance when a woman is on unpaid maternity leave. We paid out around £1,400 which was rather unwelcome.
Regarding the scrapping the Tories did float the ides around the election time but the howls of middle class anguish proved to hard to resist!

groundy

You can write direct to the Nursery informing them you will be paying £243 in fees on behalf of your employee (if you google I am sure you can find a template letter). You then pay the nursery as part of your employees wage therefore double entry Dr Wage Cr Bank/Cash. No need to pay high fees to agencies.

deanshepherd

Providing the nursery accept this. Many won't as they say they cannot contract with a party other than the parents and if the company settles a pecuniary liability of the employee that is a BIK and not covered by the childcare vouchers scheme. Fun huh?!

zara5034

blobbyh wrote: »

The cost of using a proper childcare agency isn't actually that great. We currently pay a 2.5% monthly admin fee for every £243.00 of vouchers bought - £6.07 - so quite neglible in the big scheme of total business related costs and at least it'll be done properly.

What have you been quoted?

Robert,

Can you let me know who your childcare voucher provider is, 2.5% admin fee sounds brilliant, is there a catch, do you need to order £243.00 at a time?

Thanks
Zara

blobbyh

Toffeemadblue wrote: »

Somewhat off topic but I only realised recently that salary sacrifices like child care vouchers must continue to be paid even when the employees wage drops below the rate of the value of the vouchers, for instance when a woman is on unpaid maternity leave. We paid out around £1,400 which was rather unwelcome.

Regarding the scrapping the Tories did float the ides around the election time but the howls of middle class anguish proved to hard to resist!

I'm a little of date on this but is this now compulsory since I was under the impression it was HMRC guidance only and it was up to each employer to decide how to interpret their guidance? For example, you could withhold childcare vouchers while an eligible employee is off but you also risk facing a potential sex discrimination claim or a claim under the Employment Rights Act. I have a 28 page pdf advising of the different stances plus advice on protecting yourselves if you want a copy.

Our voucher provider is Kiddiviouchers but since we have so few people now partaking in the scheme, I expect our admin fee will probably rise soon.

coojee

Toffeemadblue wrote: »

Regarding the scrapping the Tories did float the ides around the election time but the howls of middle class anguish proved to hard to resist!

No it was actually Labour that mooted it. I'm finding that increasingly people have very short memories about just who got this country into the mess it's in at the moment. Anyone with one iota of common sense knows that if their income is £30,000 per year they don't go out and spend £200,000 every year and hope that sometime in the future someone will wave a magic wand and make all the debt go away.

blobbyh

coojee wrote: »

No it was actually Labour that mooted it.

I didn't address the political point but yup, it was another of Labour's harebrained idea's to screw employers even more for what is arguably a lifestyle choice. We were warned about this in June 2009 when our childcare voucher company were clearly worried many companies would scrap the scheme were it made compulsory for participants to meet the full cost of providing vouchers for absent employees. And as I said, unless someone can confirm otherwise, I'm under the impression that it's HMRC guidance only and employers are not compelled to follow it (though they do risk incurring the wrath of the welfare/tribunal police should they choose not to). This is deep into Payroll Pro territory if he gets to read this in order to offer his viewpoint.

Personally - and I know this comment may be unpopular to some - but like many others from yesteryear, I've had my kids, suffered the cost and I just don't see why anyone choosing to have them today should either burden the employer or burden the taxpayer with their choice. 'Legislation' like this just prevents some employers from hiring women of child bearing age and it arguably hinders the employability of females rather than advancing them. It might be illegal but it's foolish to deny it doesn't exist.

*Jo

blobbyh wrote: »

Personally - and I know this comment may be unpopular to some - but like many others from yesteryear, I've had my kids, suffered the cost and I just don't see why anyone choosing to have them today should either burden the employer or burden the taxpayer with their choice. 'Legislation' like this just prevents some employers from hiring women of child bearing age and it arguably hinders the employability of females rather than advancing them. It might be illegal but it's foolish to deny it doesn't exist.

I have to agree. It may be illegal but it doesnt stop employers find some "other" reason why you don't fit the bill for the job. I personally have always made it clear that I had no intention to have any more children (I have one daughter now 16). I've always had to work to bring up my daughter and have always put her first but also have not used the fact im a single mother to my advantage at work. When my daughter was ill I took the minimal time off from my holiday entitlement which I agreed in advance with my then employer at interview.

deanshepherd

Toffeemadblue wrote: »

Somewhat off topic but I only realised recently that salary sacrifices like child care vouchers must continue to be paid even when the employees wage drops below the rate of the value of the vouchers, for instance when a woman is on unpaid maternity leave. We paid out around £1,400 which was rather unwelcome.

Surely salary sacrifice just means they are opting to be paid their salary in a different form (vouchers rather than cash). It should come as no surprise that if they no longer need the vouchers that you should be paying them the cash instead.

coojee

deanshepherd wrote: »

Surely salary sacrifice just means they are opting to be paid their salary in a different form (vouchers rather than cash). It should come as no surprise that if they no longer need the vouchers that you should be paying them the cash instead.

I think what Toffeemadblue is saying that if they get vouchers for £240 per month as a salary sacrifice then even when actual salary drops below £240 or even drops to zero, the vouchers must still be paid. If they weren't getting the vouchers they'd have got nothing; cash or otherwise. Seems a bit odd and must be quite a nice little earner for employees. No wonder employees without kids get annoyed. If their salary drops to nothing they don't continue to get something for nothing.

deanshepherd

Ah, I see. Yes, definitely a sting in the tail that one.

Note to self: Must get the wife to start taking vouchers before she goes on maternity leave next month..!

coojee

deanshepherd wrote: »

Ah, I see. Yes, definitely a sting in the tail that one.

Note to self: Must get the wife to start taking vouchers before she goes on maternity leave next month..!

Yes, definately a nice loophole if you plan to take unpaid mat leave at the end of statutory mat leave.

Note to self: Get younger, have more babies, take mat leave....no wait...that'd mean having the babies...aaarrrrggghhh no! Way past all that, don't wanna go there again!

blobbyh

coojee wrote: »

No wonder employees without kids get annoyed. If their salary drops to nothing they don't continue to get something for nothing.

This is a bone of contention and a possible defence for employers wishing to override the HMRC advice, the argument being that by essentially topping up "cash" for those on maternity leave, they'd be discriminating against others absent such as those on long term sick leave who wouldn't get equal top ups. You can't win either way!