What is the Childcare Voucher scheme?
Childcare Vouchers are a non-cash benefit and are exempt from tax and National Insurance contributions. This is a government initiative designed to help parents save money on the cost of childcare. The vouchers cover the cost of qualifying childcare up to 1 September after a child’s 15th birthday (their 16th birthday if they are disabled).
Please note that the government is closing the Childcare Vouchers Scheme to new entrants after April 2018 and parents/carers will use the Tax-Free Childcare (TFC) scheme instead.
How do Childcare Vouchers work?
Parents exchange part of their gross salary (via ‘Salary Sacrifice’) for the vouchers. The amount you can receive in Childcare Vouchers without having to pay tax or National Insurance contributions will depend on when you join the scheme and your salary level.
Once you have arranged your childcare vouchers, you will only pay tax and National Insurance on the remaining portion of your gross remaining salary. The amount you take in childcare vouchers will be shown on your payslip. You will receive your childcare vouchers on or after your pay date as they are part of your salary.
We use a company called Computershare Voucher Services (‘Computershare’) who administer the scheme for us.
What type of childcare is covered by the vouchers?
The vouchers cover the cost of what is termed ‘qualifying childcare’. They’re usable by any nursery, playgroup, nanny, child-minder or au pair – or by some activity clubs and holiday schemes in the school holidays as long as the childcare provider is registered and regulated – most will be, but if you’re not sure then check with Ofsted (see http://reports.ofsted.gov.uk/)
How do I apply for childcare vouchers?
You should contact Computershare directly on telephone number 0845 002 1111 and tell them that you want to join the scheme. You will need to give them your payroll number, which you can find on a recent payslip, and your company scheme number. For most of you this is 00 00 01 55 87 but if you work for C+W Agency then your scheme number is 00 24 15 81 36
Computershare will then arrange for the necessary paperwork to be completed and then allow us to deduct the cost of the vouchers directly from your gross salary each month.
Please note that you will receive your vouchers directly from Computershare and not from us.
Can I backdate vouchers and/or buy a few in one purchase?
Yes, you are also able to backdate vouchers to the beginning of the current tax year (although your child must be born for you to be able to sign up). If you decide you wish to backdate for the current tax year, you must let HR know as soon as possible before 5 April (i.e. the end of the UK tax year)
Can I use vouchers to pay for more than one carer or for an activity club in the school holidays?
Yes, you can use your childcare vouchers to pay more than one carer and you can decide whether to pay your carer in full using childcare vouchers or split the payment between childcare vouchers and cash.
You can also save up your childcare vouchers and use them when you need them most – perhaps for activity clubs or holiday schemes in the school summer holidays.
Sometimes you may also be able to use childcare vouchers for tuition for your child, as the tutor is providing ‘childcare’ at the same time as the tuition. However, the tutor/institution must be regulated and must accept vouchers, so you should check with the tutor first or ask your local authority children’s services department.
Is there a time limit on the vouchers? How long are they valid?
Vouchers are valid for a long time, so if you know you’re going to have higher childcare costs during the holidays, you could collect vouchers in advance. Vouchers are usually non-refundable, so don’t collect more than you can use.
USEFUL LINKS:
https://www.childcarechoices.gov.uk/
http://www.computersharevoucherservices.com/parents/Pages/how-much-can-I-save.aspx
http://www.computersharevoucherservices.com/parents/Documents/parent-information-pack.pdf
Also, to check the current allowances please check the HMRC website http://www.hmrc.gov.uk/calcs/ccin.htm#1
(this page last updated Aug 2017)