Childcare Vouchers

[Nomes]

Can anyone advise me on childcare vouchers?

I'm a new mum and believed that all organisations were able to provide childcare vouchers to their employees taken as part of their salary.

Is this not the case, as I understood it didn't cost the organisation any extra cost so there was no reason not to provide them?

 

[iksol]

I've been receiving childcare vouchers for the past 3 years, from 2 different employers.

ALL British organisations are able to provide childcare vouchers, although unfortunately this doesn't mean they are obliged to - it's at their discretion.

It does actually save a company money if they provide them, in the form of employer NI contributions. It's also quite easy to administer, as long as HMRC guidelines are followed. So this is a good selling point if you want to persuade your employer.

As you say, it's collected as a pre-tax salary sacrifice, and paid to an Ofsted-registered childcare provider.

There are third party agencies such as Busy Bees who are happy to administer it on behalf of an employer, but to be honest it's not complicated.

 

[MrPAYE]

It's also quite easy to administer, as long as HMRC guidelines are followed. So this is a good selling point if you want to persuade your employer.

....but to be honest it's not complicated.

A common misconception. If it's that easy how do many employers make huge mistakes who then ask my business to sort them out ?

Make no mistake, salary sacrifice is a minefield - which is why so many employers still don't do it, despite the tax advantages.

The childcare voucher scheme only works where an employer makes this available to all employees. If your employer does not currently offer this there's not much you can do.

 

[MrPAYE]

Hi!
At Clarity, we work closely with employers to make implementing a childcare voucher scheme in the workplace as simple as possible, and we provide all the guidance and documentation required to ensure the scheme is compliant with HMRC regulations.

I have no direct experience of working with Clarity so cannot comment on how robust this statement actually is.

What I can say is that this is the usual mantra of many CCV providers out there, including some of the most well known, but the reality is that many, many schemes fail from a tax point of view, either in certain areas or completely.

As in so many other walks of life, it is buyer beware !!

 

[MrPAYE]

Recent blog on this very subject http://www.optimumpaye.co.uk/blog/2010/11/03/51-childcare-vouchers-why-why-why

 

[Stuart Bailey]

if your director doesnt know ask them to contact their accountant

 

[sjbeale]

You could put your request in writing to see if the company might be interested to offer this benefit. I can recommend Heather Start of Gemelli Childcare Vouchers - www.gemelliccv.co.uk to work with the company to set the process up.

 

[Amira La Vegan]

All very good advice except that by mentioning Busy Bees, possibly the most expensive company in the market, you may put employers off, as a scheme from these would eat most of the NI saving up. Typically they charge 8-9% (NI is about 13.8%), whereas other providers, such as ClariCare, or KiddiVouchers, charge a humane 2.5%.

I was a member of a scheme with Busy Bees myself at my last place of work and, compared to other companies, their service is a disgrace. I also understand they go in at ridiculously low fees, in order to poach larger contracts from their competitors, whilst penalising smaller businesses with their highest rates.

Parents get a 5% discount at Busy Bees nurseries, but even a 50% discount wouldn't entice me to use them again.