Angela

Guide to Childcare Vouchers

by Angela | Published on April 30, 2014

I would like to give you a little bit of information about childcare vouchers. I want to let you know about what child care vouchers are, how much money you can save, where they can be used, additional benefits and how you can get started. So read on and hopefully I would have covered everything you were looking for. So if you’re ready, let’s get going!

childcare vouchers

Childcare Vouchers – What are they?

OK, so basically childcare vouchers are a government initiated scheme from employers for working parents that enables them to pay for their childcare costs of children up to the age of 16 years. A child will qualify for childcare vouchers up to the first September after their 15th birthday. If the child is disabled then it’s the first September after their 16th birthday.

As parents you simply order up to £243.00 (basic rate tax payers. Higher and additional rate caps are lower) per month to be deducted from their wages where the money is exchanged for childcare vouchers. With these vouchers you can then pay for childcare with a registered childcare provider.

Childcare vouchers enable parents to carry on working and have the peace of mind that their child or children are being taken care of.

How much will childcare vouchers save me?

In a year childcare vouchers could save working parents £933.00 as childcare vouchers do not attract national insurance contributions or tax. A household where both parents join a childcare voucher scheme could potentially save £1,800 a year. The amount of money each working parent can save all depends on how much they are earning and other individual circumstances including, salary sacrifice deductions or maybe pension deductions.

So let’s get things straight childcare vouchers will:

  • Help you make big savings (with tax relief on up to £55.00 per week)
  • Double your allowance (if your partner is also eligible) Also remember with childcare vouchers you:
  • DO NOT PAY ANY TAX OR NI on their value

Where can childcare vouchers be used?

You can use childcare vouchers to pay for the following registered childcare for children up to the age of 16 years.

  • Childminders
  • Nurseries
  • Pre schools
  • Play schools
  • Nannies
  • Crèches
  • Au Pairs holiday camps/clubs
  • Before and after schools clubs
  • Private schools
  • Play schemes
  • Reception classes and out of school care at independent schools.

How do I register?

Well it all starts with your employer they need to offer the childcare voucher scheme to you. If your employer does offer the scheme then ask them for your unique web link and password. The process of receiving and paying with childcare vouchers is simple and straightforward for both the employer and employee.

Most employers who do offer childcare vouchers will do so through a salary sacrifice scheme. What this means is that you reduce your salary by a certain amount and receive childcare vouchers of the same value and pay no tax or NI.

To first join the childcare voucher scheme you’ll need to complete a salary sacrifice agreement, your employer will give you help and directions on how to go about doing this.

Once your agreement has been submitted to your employer they will reduce your salary by the agreed amount and then your vouchers will be provided for childcare.

Final Thoughts

Well that’s about it really I hope that I have given you a bit more information about childcare vouchers and you have things a bit clearer in your mind about how you go about getting them.

There really is nothing to it, it isn’t designed to be difficult, the process is clear and simple and should run smoothly, and you will have peace of mind. That’s it from me, good luck with your childcare vouchers.