Childcare vouchers

[legal girl]

A friend is looking to return to work shortly and would like to benefit from childcare vouchers. How do you go about getting these? The accounts department at her work says you have to get these from the nursery the child will be going to - is this right? Any help gratefully received.

[Compostella]

Each parent is allowed upto �55 per week of their salary to be paid in childcare vouchers which are tax exempt. The childcare vouchers can then be used to pay for or put towards the cost of your childcare.

It is up to your company to do this rather than the nursery.

Not all companies offer this benefit.

The benefits to you are that you will not pay income tax on upto �2860 of your income.

[Compostella]

Or you can not pay tax on �5720 of your combined earnings if both parents claim them.

[Lily_b]

I think your friends work are getting confused between childcare vouchers which are as described by Compostella and the Government Nursery voucher scheme.

The latter is when the nursery claims for up to 5 sessions per week which is funded by the government, you may need to look them up as I think the amounts have changed recently.

[juliefer]

This H M Revenue and Customs Website gives the details your friend is looking for about the childcare vouchers:

http://www.hmrc.gov.uk/leaflets/ir115.pdf

The rate has now gone up and, if their employer is operating the scheme, people can get �55.00 per week or �243.00 per month of vouchers tax and National Insurance free.

Not sure if this is on the website above but HMRC warn that anyone getting, or able to get Tax Credits, will probably be better off doing this than taking childcare vouchers.

If your friend wants to look at more detailed information, try www.hmrc.gov.uk.

Also, if she Googles 'childcare vouchers' she'll be able to look at further information from commercial companies.