Monday, February 16, 2009
We recently spoke to an engineering company. “We’re a bunch of blokes, on the factory floor, making aircraft parts”, they said, “childcare vouchers are not for us”. They had 1000 employees. We calculated that as a company, they could be saving over £11000 per year on National Insurance. Their working parents could be saving nearly £1200 each per year in National Insurance and Income Tax, or nearly £60000 between them. That’s a lot of money. It’s money that is provided as part of a government-backed scheme, to help pay for the provision of childcare. It’s money that, to be frank, every company should be grabbing a hold of for their staff. Especially in these days of credit crunch. All a company has to do is give us a call and we’ll set up their scheme for them, tell their staff about it and run it for them. It really doesn’t matter what their company does, or how many blokes they’ve got working for them. After all, childcare vouchers can be used by mothers and fathers alike.
Both parents benefit
My wife loves internet shopping. Whether it’s on eBay, or at Sainsbury’s. It’s the convenience really. 24-hour access and delivery to the front door. She’s at home most of the time, choosing as she does to look after our kids instead of working. However, the littlest one started nursery last year. We are able to reduce the cost of the nursery by using childcare vouchers. What’s really neat about the You at Work scheme is that my wife can access the system from home, across the internet. My payroll department takes £243 of my pre-tax and pre-NI income and pays it to You at Work. They make the funds available for my wife to pay our daughter’s nursery in the form of childcare vouchers. My wife often makes the payment on a Sunday evening. She can even top it up with a bit of her own money if the bill comes in for more than the government lets me contribute.
Using childcare vouchers for football?
My son is now 17, and plays football for the local team. When he was 11, he used to spend most of his half-term holidays on football courses. They used to cost me an arm and a leg. We had a leaflet come through the door last week, announcing this half-term’s football courses. My daughter (13) wants to go on one. I just noticed that the people providing the course are OfSTED registered, so I can use my childcare vouchers to pay for the course. Fantastic. I might even be able to afford the trial week at the local Premiership club next Easter now.
Making people take notice
The greater the number of staff that take up childcare vouchers, the greater the savings to the company. There are a number of tried and tested ways of getting the message out there: emails, desk drops, intranet. There are a number of others that seem to work well in really getting people interested. How about information in/on payslip envelopes? Posters in the canteen; posters on the backs of loo doors, text messages to the van drivers?
- Carlotta Brambilla (You at Work)
- 2/16/2009 15:29
There is a common misconception that only women are entitled to buy Childcare vouchers, where in fact men can do too.
Also where husband and wife work for the same company, they can both take up Childcare Vouchers and get double the savings.
- Neil Forster (Stoke on Trent College)
- 3/12/2009 11:57
I recently discoved another tax and NI exemption related to Childcare. If the employer has its own Childcare facility, and the employees child uses them then the employees childcare costs have no upper limit with regards to tax and NI savings. If the costs per week are £100, then you save tax and NI on £100.
HMRC -
"If you provide childcare in a nursery or play scheme on your premises (or on premises you provide jointly with others that you are wholly or partly responsible for financing and managing) no tax or NICs is due on the benefit to your employees. This exemption also applies if you allow another employer’s staff to use your childcare facility, if those employees work on your premises. The conditions for this exemption can be accessed from HMRC’s"
No need to issue a voucher either, the money can come direct from their pay (the same as a voucher) but just goes back to the employer.
More details on the HMRC web site - seach for 'employer supported childcare'
- Manesh Patel (YouatWork)
- 3/13/2009 10:44
Hello Neil Forster
Your understanding regarding on-site childcare facilities having tax and NI exemption is correct and this is in addition to childcare vouchers.
As an organisation you can offer childcare vouchers and on-site facilities, so all parents can benefit as childcare vouchers can be used against costs for after school clubs, summer camps etc.
There are many parents of children off an age which can not use the on site facilities provided by the organisation, but are still able to use childcare vouchers for payment of costs on other types of care.