Childcare Voucher Information

It’s so simple for working parents to save money on childcare……

In April 2005 the Government reformed the Tax and National Insurance exemptions to support the national childcare strategy. The scheme means that companies can offer employees Childcare Vouchers as part of their salary TAX and NI FREE.

Childcare Vouchers are a simple, flexible and effective way for employers to help their employees with their childcare costs. Companies can give employees up to £2,916 per year tax free in childcare vouchers, saving parents up to £1,195 each in Tax and National Insurance.

What are childcare vouchers?
The vouchers have a face value of a certain amount that can be used to redeem against the cost of approved childcare.

What are the savings?
On the maximum voucher value of £243 per month there is a total saving of 33% for basic rate taxpayers (£80 p.m.) and 41% for higher rate taxpayers (£100 p.m.). Added bonus – savings for parents can be doubled if both parents take childcare vouchers.

How does the scheme work?
The scheme works on a Salary Sacrifice basis which means the employee will give up some of their salary in exchange for the same value in vouchers.

What are the Government’s Rules?
Childcare vouchers are Tax and NI free up to a maximum of £55 per week (£243 per month). Employees’ net pay after Salary Sacrifice must not go below National Minimum Wage. Vouchers can be used for children up to the age of 15, or 16 if disabled. The employee receiving the vouchers must be the parent, step-parent or legal guardian of the child. The vouchers must be used with childcare providers who are registered with Ofsted in England, The Care Standards Inspectorate in Wales or The Care Commission in Scotland – this may be childminders, approved nannies, day nurseries, after school clubs, holiday clubs.

What are the downsides?
Getting childcare vouchers can impact on entitlement to tax credits, though many will still gain – Gemelli can calculate this.

To find out more visit – www.gemellichildcarevouchers.co.uk. Alternatively e-mail - enquiries@gemelliccv.co.uk or ring 01280 851113 to request a Parents Information Pack.

Gemelli Childcare Vouchers
Gemelli House
Wood Green
Buckingham
MK18 5DZ
Tel: 01280 851113
www.gemellichildcarevouchers.co.uk