Tel: 0845 601 6020
Employers area
FAQs relating to Child care
The fastest way to answer your specific questions is by calling us on 0845 601 6020 - but here are some things you may want to know now:
Quick links:
Why offer Childcare Vouchers? What are the savings to be made? What is meant by 'registered or Approved' childcare? How do we provide the exemption? How much administration is needed? What about Revenue & Customs employment contracts? Can everyone benefit from the scheme? Do I have to offer it company wide? Who can claim the support and is it per child?
Why offer Childcare vouchers?
Our childcare voucher scheme is a valuable staff benefit, it lowers your payroll costs, saves employees tax, improves staff retention, absenteeism and recruitment.
Your company will be able to show it is a caring employer, and understanding of the needs of working parents to achieve a good work/life balance.
What savings can be made?
Under the current HMRC rules, up to £55 per week (£243 per month) of salary for one or both working parents can be exempt for tax and NIC, and exempt for employers National Insurance Contributions (NIC). This equates to around 13.8% cost saving for the employer, around £402 annually, per employee. Your staff will benefit by a saving of tax and NI up to *£920 annually. *Basic rate
However, there may be changes to the Government tax rules - so VSL will advise and update you when necessary.
What is meant by 'registered or approved' childcare?
Registered care is officially inspected and has to reach certain standards. Registered care providers in the UK comprise:
Nurseries, Playgroups,Childminders, after School Clubs, Holiday Play schemes.
(Nannies and Sitter Agencies are registered in Scotland).
Childcare at home by grandparents/relatives or friends is not eligible. How do we provide the exemption?
Current rules allow you to offer the exemption:
- In addition to your employee's existing salary
- As a salary sacrifice scheme - where the employee gives up an agreed amount of salary, in exchange for the childcare voucher provided by you.
- Or as a combination of both.
How much administration is needed?
The scheme will need to be introduced by your HR and Payroll teams, which we can guide and support. After this, Childcare Voucher Solutions offer a totally flexible and tailor made programme. For a low monthly service charge, we will distribute vouchers to your staff by online delivery or vouchers, make weekly or monthly payments with on-line tracking, and we handle voucher redemptions and direct payments to Nurseries.
What about HMRC employment contracts?
We can support you with contract amendments, letters to staff and HMRC. Our marketing package also is available to explain and promote the scheme to your staff.
Can everyone benefit from the scheme?
Staff earning below the tax bands or primary NI thresholds, and paying no tax or NI would not benefit. Those who receive more than the basic family element of child tax credit and claim childcare through the element of Working Tax credit, should contact the Revenue to see if signing up to the Voucher scheme would affect tax credits.
Do I have to offer it company wide?
The exemption must be available to all staff in the particular location where the scheme operates. For example, if multi-site operation, you can offer it at one site, but not all sites if you choose.
Who can claim the support and is it per child?
Any working parent can take advantage of the support where it is offered. If both parents of a child work for the company, they can both choose to take the support, making savings on their individual tax and NICs. The support is not offered on a per child basis.
