apple Registered Posts: 39 Dedicated contributor ? ? ?
Can a self employed employer set up childcare vouchers as benefit? the business has got 4 employees and 1 of them is the wife working as an administrator for his husband business. Can the business set up childcare vouchers and pay for childcare this way? what is the easiest way to set up childcare vouchers? can the nursery invoice the business? thanks


  • Gem7321
    Gem7321 MAAT, AAT Licensed Accountant Posts: 1,438
    Yes! Childcare vouchers are an exempt benefit in kind. You can offer vouchers or if you want the nursery to invoice the business this is called 'directly contracted childcare'.

    The scheme can be run internally or you can use an agency (such as busy bees, kiddicare, edenred etc.). Although employers can support childcare on top of the employees normally salary it is more common to operate a salary sacrifice scheme. The maximum amounts available depend on the employee's tax status and it is worth pointing out that the employees tax credits may be affected.

    Google 'hmrc employer supported childcare' for more information.
  • Jawz
    Jawz Registered Posts: 53 Regular contributor ⭐ ? ⭐
    Apple, from what I can gather, I think you're asking can a sole trader business (self employed) who employ 4 employees under PAYE (employer-employee relationship) operate a child care scheme? Childcare vouchers are a Goverment initiative, aimed at helping working parents to afford quality childcare. The scheme offer significant savings for both parents and employers. As Gem7321 already stated above, the answer is Yes. I dont think the employer is required to use and agent to pay the vouchers either, i.e they can operate the scheme by themselves and pay the childcarer a cheque (vouchers) cash not allowed. However for a small fee, I found it much easier to set up and child care voucher by using an agent like Kiddicare for example.

    Parents (employees) can receive up £243 a month (depending of your tax status) of childcare voucher from their employer,free of Tax and NI. Most childcare vouchers are provided through salary sacrifice, which means parents receive vouchers instead of part of their salary

    Employers also benefit from NI saving worth up to £402 a year per scheme member.

    *Please note what Gem7321 mentioned above regarding tax credits and other benefits that maybe affected as a result of using childcare vouchers scheme.

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