The rules surrounding Employer Supported Childcare schemes were changed in April 2005 and employers are now able to provide their employees with up to £55 per week in childcare vouchers.
For employees this can be hugely beneficial in helping with the costs of providing childcare whilst the parent(s) is at work. As most schemes are offered through the salary and payment for them is taken before tax, the savings for someone on basic rate tax can be up to £962.00 per annum.
For employees this can be hugely beneficial in helping with the costs of providing childcare whilst the parent(s) is at work. As most schemes are offered through the salary and payment for them is taken before tax, the savings for someone on basic rate tax can be up to £962.00 per annum.
However, it is worth noting here that this may affect the amount of tax credits you can get. HMRC have provided an online calculator so that you can see if - overall - you would be better off taking the childcare vouchers or not. Click Here For HMRC Calculator
For employers this is certainly worth considering as the employer NIC savings can be substantial. By offering Childcare Vouchers to all employees through a Salary Sacrifice Scheme employers can save up to 12.8% of the value of the Childcare Vouchers they provide their employees. For just one employee receiving the monthly maximum (£243) employers could potentially save £373 per annum alone. These savings will offset the charges made by the Voucher Provider.
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