Are You Missing out on £1,000’s?

When visiting my regular Postnatal Mum’s group this week it became clear, as conversation turned to returning to work, how the voucher scheme offered to reduce childcare costs is being missed by many. Read on... you could be missing out on £1,000’s!

What are childcare vouchers?
Childcare vouchers are a great way for employers to give working parents help with dependent children. They can help you find quality childcare to suit the needs of your family – and, because you don’t pay tax or National Insurance on childcare vouchers, you can save up to £1,195 per year.

Childcare vouchers can be used to pay for many kinds of childcare, typically including:

• Nurseries, playgroups and pre-school
• Registered childminders
• After-school clubs and breakfast clubs
• Holiday play schemes
• Nannies and au-pairs

If your employer provides you with childcare vouchers you will not have to pay tax or NICs on the first £55 per week, or £243 per month. However if your vouchers are worth more than this, you will have to pay tax on the remainder.

For tax purposes you are only entitled to one exempt amount of £55 per week (or £243 per month) regardless of the number of jobs or employment's you may have. For NICs you can receive an exempt amount from more than one employer. If both you and your partner are provided with childcare vouchers you are each entitled to an exempt amount of childcare vouchers.

You may get paper or electronic vouchers directly from your employer or your employer may ask a childcare voucher provider to provide them directly to you. Your employer will tell you which type of voucher (paper or electronic) that they will make available to you or if you can choose.

You do not have to use childcare vouchers in the week or month they are provided. If you do not wish to use the vouchers immediately you can save them up to use later. For example, your childcare costs may be more than usual during school holidays, and you may want to use them then.

Information your childcare provider will need:
If you decide to get childcare vouchers, check that your childcare provider will accept them. If the care provider will accept them, and you have a choice of paper or electronic vouchers, ask which the carer would prefer.

Your employer or your employer’s voucher provider will normally be able to answer any questions that your childcare provider has. It is possible that the childcare provider already accepts voucher payments from the voucher provider chosen by your employer.

Your childcare provider will need to make an arrangement with your employer or your employer’s voucher provider to receive payment. This is normally a simple process which will be advised to you by your employer.

If the voucher doesn’t cover the whole cost of the childcare, agree with your childcare provider how you will pay the extra.

One word of caution... If you are also eligible for Tax credits then you may find that your claim could be affected by using the voucher scheme.

There is a very handy calculator on http://www.hmrc.gov.uk/calcs/ccin.htm which will help you see which works best for you.

While you’re there why not check you’re not missing out on any tax credits... After all every penny counts when raising little people!

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