Childcare Vouchers – The Benefits
Childcare Vouchers can be beneficial to working parents as it enables them to save money.
All employers are able to facilitate a request for the vouchers.
As Childcare Vouchers are decucted from your earnings they cannot be held subject to National Insurance or Tax. This means substantial savings of up to £933 per annum can be saved for all parents that pay the standard 20% tax rate and £623 for 40% and 45% tax payers. The employer generally deducts the value of your voucher from your gross salary pre tax – salary sacrifice.
Please note: although Childcare Vouchers are beneficial to the majority, they aren’t always a financially sensible option and tax credits can be affected.
Childcare vouchers can be exchanged for many types of child care.
This include; but are not limited to the following:
- Play School
- Au Pair
- Pre School
Childcare vouchers are available to parents for all children aged from birth through to 15 and can be used in conjuction with most type of registered or approved child carer. Regardless of your type of child care – be it hoilday club, breakfast or after school clubs etc, you can normally exchange vouchers for its cost.
Your employer will buy the childcare vouchers from Early Years, and then, as stated, deduct the cost from your gross salary, Because this deduction comes pre NI and taxes, it enables you to get vouchers greater than the amount your would have been paid. You then redeem the voucher with childcarers.
Payments to child carers are all referenced so its easy to add voucher payments to their accounts. There is no extra cost for the carer, so there’s no problems with accepting vouchers from them.
Childcare Voucher Scheme Help for Parents
Full information and fact sheets are available here for you and your employer.
The childcare voucher scheme is simple, flexible and most importantly saves working parents money. Complete a small form and register interest in the scheme and they will do the rest for you, and contact your employer on your behalf.