Childcare Vouchers - Saving Tax and NI
April 2, 2014
Many of our contractors are working parents and have to pay for childcare. Childcare Vouchers are a useful and tax efficient way for employees to pay for their childcare costs.
Childcare vouchers are an employee benefit available to all eligible working parents. They are substituted for part of your salary, enabling working parents to save money on childcare. There are many providers of Childcare vouchers should you wish to join a scheme. Popular schemes are run by Busy Bees, Computershare Voucher Services, and Edenred
You can exchange up to £243 a month (£55 a week) of your gross salary for childcare vouchers. The part of your gross salary you exchange for childcare vouchers is tax-free and exempt from National Insurance contributions (NI). This mean you can make a savings of up to £933 per parent per year.
How it works:
You must ensure that the childcare (whether a nanny or a nursery) you have placed your child with is registered to accept childcare vouchers. There are numerous childcare facilities and childcare vouchers can be used for children up to the age of 16.
You then choose the provider you wish to register with, and sign up with them (no cost is involved in signing up to the scheme.)
Most providers will talk you through the amount of money that needs to be deducted from your salary for childcare vouchers during their sign up process. You must then tell your employer and pass on the details of the childcare voucher provider. When your employer receives this information they will then set up the process to deduct the money each week/month from your salary.
Carrington Umbrella have a number of contractors who us a Childcare Voucher scheme. The process is very easy to set up and gives our contractors a valuable benefit as well as saving them tax and NI.
For further information on using Childcare Vouchers as contractor or freelancer please
call us on 0203 713 4530 or email firstname.lastname@example.org