Childcare Vouchers / Ofsted Registration
Childcare vouchers allow you to pay for childcare from your PRE-TAX salary – but act FAST if you want them. While voucher schemes are available to new entrants until 4 October 2018, many will need to apply now!
It may not seem a huge amount, but the impact can be huge. If you’re not taking advantage, check to see if it’s worth signing up – the Government scheme was meant to close to new applicants in April but was extended for six months, so there are still a few weeks left…
Childcare Voucher change to Tax Free Childcare – What you need to know:
- 30 Free Hours of Childcare – This cannot be used for Nannies
Until October 2018:
- Dependent upon the best scheme that works for family needs – you will be able to apply for either Tax-Free Childcare or Childcare Vouchers.
After October 2018:
- To all new Applicants (if eligible*) Childcare vouchers will not be available. Eligible applicants will need to apply for Tax-Free Childcare
|Childcare Vouchers||Tax Free Childcare|
Childcare Vouchers – What do you get?
- Each Parent/Carer can claim up to £243 in Childcare Vouchers.
- If Employers of both Parents/Carers offer a scheme, then up to the same amount can be claimed by both.
- Amounts that can be claimed will differ with earnings.
|Up to £41,865||Up to £243 per month|
|£41,865 – £150,000||Up to £124 per month|
|Over £150,000||Up to £97 per month|
Childcare Vouchers – how do they work?
- Are only available to Parents/Carers if their current employer offers a scheme.
- Prior to the usual Tax and NI deductions made to the parent/carers salary – a portion of the salary is deducted and paid to the scheme.
- A tax saving is made – as there is no tax paid on the voucher and less of the salary is taxed.
- The Childcare Voucher provider will release the portion of the salary paid into the scheme to the Nanny, upon instruction.
- A portion of the Nanny’s salary is paid via the Childcare Voucher Provider.
- Nanny’s Net Pay – the total value of the vouchers is deducted, and the rest will be paid as normal to the Nanny.
Tax-Free Childcare – What do you get?
- Up to £2,000 per child, per year can be saved.
- For each child an online childcare account can be opened.
- The Government will pay an extra £2 automatically for every £8 paid in.
- Every three months the Government can pay up to £500 per child (£2000) towards childcare.
- Can be used to pay the Nanny.
Tax-Free Childcare – how is it managed?
- Via an online Childcare account.
- Register to open an account and search and select your childcare provider to receive payments.
- To Register: www.gov.uk/help-
What does this mean for Nannies?
- Nannies will need Ofsted Registration for you to use Tax-Free Childcare.
- Nannies are Childcare Providers so will need to register as a provider with the scheme.
- You will be able to send payments directly from your Tax-Free Childcare account to the Nanny’s Account.
So, how do you pay Tax and National Insurance via the Online Account?
Step 1: Log into your Tax-Free Childcare Account
Step 2: Add another Childcare Provider
Step 3: Add HMRC as Childcare Provider and the amount you want to pay.
Step 4: Enter a 17 Digit Reference Code (will change with each payment)
- You can view and print previous payments.
*Eligibility (Tax-Free Childcare)
- The Parent/Carer must have a child living with them.
- Parent Carer must have a child under 12/under 17 if disabled.
- Both Parents/Carers or single Parent must be in paid work (Employed or Self Employed) and with average expected income of at least £115 a week.
- Each Parent/Carer – Earn less than £100,000.
- Parents/Carers must not be receiving other Government Support – i.e – Tax Credits, Childcare Vouchers etc.