Childcare Vouchers are a scheme some employers offer to help working parents save on registered childcare costs.
Childcare vouchers are not means tested and are available to all working parents whose employer operates a childcare voucher scheme.
The vouchers can be used to pay for all types of childcare including day nurseries, registered childminders, crèches, playgroups, out of school hours clubs, holiday play schemes and home childcarers approved under the new Home Childcarer Approval Scheme.
Childcare vouchers from your employer may affect the amount of tax credits you could receive get. HM Revenues and Customs offer a calculator that can help you decide if you would be better off taking childcare vouchers or not. It’s just a guide and your actual tax credits entitlement is worked out when you make a claim or report a change in circumstances.
Your entitlement to tax credits, however, could be affected. This is because you can only claim help through the childcare element of Working Tax Credit on childcare costs that you meet yourself.
If your employer meets any of your childcare costs, even if your pay has reduced in return (a salary sacrifice) these costs do not count.
You can find more information at www.vouchers4kids.co.uk
Nine out of ten families are eligible for some financial assistance through the Child Tax Credit and Working Tax Credit. The amount you receive will depend on your circumstances.
Families with children can claim Child Tax Credit if their income is no more than £58,175 a year (up to £66,350 if you have a child under one).
The amount you get depends on various things, including your annual income and is paid directly into the bank of the main carer.
The other tax credit you may be entitled to, if either you or your partner is working, is called Working Tax Credit.
It includes a childcare element to help families who are working and spending money on childcare.
Find out more:
You will need to know the following details before you use the calculator:
- your income
- your partner’s income
- your working hours
- any benefits you’re claiming, or have just stopped claiming
- the average weekly amount you spend on childcare