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Childcare costs can make it impossible for mums to go back to work.
Did you know that the ‘Childcare Voucher' scheme can save you £1,000s on nursery fees or child minder costs every year.
How the scheme works
It allows you to pay for childcare from your pre-tax income. Ok so this sounds a bit boring but it can make a
huge difference at the end of the month. Look at it this way, for every £1,000 a basic rate taxpayer earns, after tax
and national insurance is deducted, they only actually receive a little under £700. By using childcare vouchers, the whole
£1,000 pays for childcare so there's a £300 gain per £1,000 of childcare. Sounds more exciting !!
What does it mean by childcare?
One of the great things about the childcare voucher scheme is that the vouchers cover childcare up to 15 and
they are useable at any nursery, playgroup, nanny, childminder or au pair who is registered and regulated by Ofsted.
If you ask, most childcare providers will simply tell you if they're registered, but if you would rather check them out
before you send your child to them there is an official way to check:
Check out ChildcareLink where you can find local registered childcare
Or use the government sites:
the Ofsted website or call 0845 601 4771
Northern Ireland - Contact your local
Health and Social Services Trust via the DHSSPS website
Wales - Go to the Care Standards Inspectorate
Scotland - Go to the Care Commission
Sorry but grannies don't count or those whose relatives look after a child ‘in the child's own home' won't be
eligible for the vouchers unless they are a registered childminder looking after the child as part of their business.
How to get the vouchers
Any parent, or person with parental responsibly for a child living with them, is eligible for these vouchers. Unfortunately,
in order to get them, your employer must run a scheme. Simply ask your employer if they run a childcare voucher scheme,
the best place to ask is someone in the human resources/ personnel department they would probably be the ones who would deal
with it if they run one, or in smaller companies just ask your boss. If your employer doesn’t provide a scheme ask them
to consider it, it costs them nothing in fact it makes them money as they don't pay national insurance on the vouchers.
Firms can offer voucher schemes one of two ways, either by operating the scheme themselves or by using one of the many
voucher companies who do all the admin for them. The fee that these companies charge should be less than the firms gains in
national insurance, so they'll still profit, and better still so will you.
These providers include: Busybees, Faircare, Early Years Vouchers Ltd, Leap Frog Day Nurseries, Accor Services Childcare Vouchers, Kiddivouchers(which donates at least 5% of all profits to various charities) and Employersforchildcare (a not for profit organisation).
Some of these companies will contact your employer
for you at your request, so it is at least worth a try, nothing ventured nothing gained as they say.
How they work
You give up some of your salary in exchange for the same value in
vouchers. Yet the tax and national insurance relief means for every £100 a basic rate taxpayer loses from their pay packet,
they get £130 worth of vouchers back (and higher rate taxpayers get even more).
If your employer offers a scheme, either
itself or through one of the voucher providers, you can pay for up to £243 a month per parent so for two working parents you
could get £486 a month of vouchers to pay for childcare.
What will the saving be?
The savings are substantial, it is estimated that it
is around 31% for basic rate tax payers or 41% for higher rate tax payers. For an accurate figure on how much you can save
have a look at the savings calculator on BusyBees.
Note of caution: If you have a low income and you are in receipt of tax credits, getting childcare
vouchers can impact your entitlement, though in the vast majority of cases you'll still gain. There's a useful calculator
on the HM Revenue & Customs site which will tell you if you're better or worse off taking the vouchers. You'll also
need to check how it would affect your pension contributions and any other benefits you may be receiving such as statutory
maternity pay.
For more infomation check out www.hmrc.gov.uk/childcare/
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