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Childcare vouchers explained


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Cost Effective childcare voucher solution for small and medium sized businesses

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Childcare vouchers explained

  1. 1. Childcare Vouchers
  2. 2. About Us• Andrew Cazalet – Director DIY Childcare Vouchers• Chartered Tax Adviser• Over twenty years experience in tax helping small businesses and other accountants on tax matters• Based in Ealing – West London UK
  3. 3. What are Childcare Vouchers?• Scheme whereby your Employer can provide vouchers which can be exchanged for childcare• Often the employer would use a specialist third party commercial provider of childcare vouchers• However provided conditions are met the Employer can implement their own scheme
  4. 4. Benefits of Childcare Vouchers• Childcare Vouchers within limits are tax and National Insurance Free• Vouchers up to £2,915 can be provided to each employee / director• For a basic rate taxpayer saving of £934 each year• Employer saves Employer National Insurance at 13.8% of the Voucher Value
  5. 5. Other Benefits• Motivate Employees• Help them save Money• Give them choice about how to be rewarded as an employee
  6. 6. New Limits Following Finance Act 2011 Basic Rate Higher Additional Rate RateWeekly £55 £28 £22Monthly £243 £124 £97Annually £2915 £1484 £1166
  7. 7. Revised Tax Savings – 2011/12 Tax YearEmployee savings – per Year – Income Taxand National Insurance• Basic rate – 20% taxpayers - £934• Higher rate – 40% taxpayers - £1,225 - for new employees £623• Additional rate – 50% taxpayers - £1516 - for new employees £606
  8. 8. Revised Tax Savings – 2011/12 Tax YearEmployer savings – per Year – EmployersNational Insurance• Basic rate – or those who joined the employer before 6 April 2011 - £402• Higher rate – £205• Additional rate – £161
  9. 9. Conditions for the SchemeThe three main conditions of the schemeare as follows:1. The child for whom the voucher isprovided must be under 16 and must livewith you. You must either be their parent ortheir legal guardian.
  10. 10. Conditions for the SchemeContinued…2. The childcare provider must beregistered/ approved with the appropriateauthorities. Informal arrangements withrelatives are therefore excluded. You canhowever arrange for your nanny to becomeregistered.
  11. 11. Conditions for the SchemeContinued…3. The scheme is only available toemployees and company directors.Unfortunately the self-employed or businesspartners do not qualify for the scheme
  12. 12. How They Work• Send Communication to all Employees asking if they want to contribute• Employer completes checklist that relevant employee qualifies• Employer or Voucher provider prepares vouchers to pass to Employees• Employees pass these to Childcare Provider• Childcare provider returns these to employer to pay
  13. 13. How to Implement a Scheme• Use a third party commercial Childcare Voucher Provider• Typical cost – say 5-9 % of the Voucher value – for two director employees receiving the maximum say £2915 times 2 = £5830 @ 9% = £524.70 each year• OR Do it Yourself with DIY Childcare Vouchers at a one off cost of £147
  14. 14. What our Toolkit Includes• Manual how to implement your own Childcare Voucher Scheme – detailed action list• Template documents you can use straight away – just enter your company name and employee details print to paper or pdf and you are away• Short video you can watch explaining how to implement the scheme
  15. 15. What our Toolkit Includes Continued…• Simple instructions on how to register your nanny with Ofsted so she qualifies for vouchers• Unlimited email support• Updates guaranteed for the next three tax years
  16. 16. Any Questions• Please contact us at• DIY Childcare Vouchers•• Business Address – Ealing Studios, Ealing Green, London W5 5EP• Twitter - @diyvouchers• Facebook DIY Childcare Vouchers