Employee Childcare Vouchers Scheme Savings
For new employees who are 20% tax payers, joining the UK Childcare Vouchers Scheme on or after 06/04/2011, and employees already in a scheme before 06/04/2011, childcare vouchers savings are as follows
- new 20% tax payers save £77.76 per month, or £933 per annum
- existing 40% tax payers save £102.06 per month, or £1225 per annum
- existing 45% tax payers save £114.21per month, or £1370 per annum
For employees joining on and after 06/04/2011 the childcare vouchers scheme savings have now changed for higher rate tax payers.
- 40/45% tax payers save £51 per month, or £623 per annum (Maximum Tax and NI free allowance of £28/25 per week, £112/100 per 4 weekly and £124/110 for monthly paid).
From 06/04/2011 employees in a childcare vouchers scheme prior to 06/04/2011 that subsequently failed to take the benefit for a continuous 12 month period will need to have a 'basic earnings assessment' carried out.
You can see the effect of having childcare vouchers on Tax Credits by following this link to the HMRC site - Tax Credits calculator.
Or better still, just call our team now and we'll talk you through it.