This document explains childcare vouchers, which allow employers to provide tax-free vouchers to employees to pay for childcare. The vouchers can save employees up to £934/year in taxes. Employers also save on national insurance contributions. The document outlines the benefits of vouchers, eligibility requirements, how voucher schemes work, and how employers can set up their own voucher scheme using a DIY toolkit.

1. Childcare Vouchers Explained
www.diychildcarevouchers.co.uk

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. 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. 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. Other Benefits
• Motivate Employees
• Help them save Money
• Give them choice about how to be
rewarded as an employee

6. New Limits Following Finance
Act 2011
Basic Rate Higher Additional
Rate Rate
Weekly £55 £28 £22
Monthly £243 £124 £97
Annually £2915 £1484 £1166

7. Revised Tax Savings – 2011/12
Tax Year
Employee savings – per Year – Income Tax
and 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. Revised Tax Savings – 2011/12
Tax Year
Employer savings – per Year – Employers
National Insurance
• Basic rate – or those who joined the
employer before 6 April 2011 - £402
• Higher rate – £205
• Additional rate – £161

9. Conditions for the Scheme
The three main conditions of the scheme
are as follows:
1. The child for whom the voucher is
provided must be under 16 and must live
with you. You must either be their parent or
their legal guardian.

10. Conditions for the Scheme
Continued…
2. The childcare provider must be
registered/ approved with the appropriate
authorities. Informal arrangements with
relatives are therefore excluded. You can
however arrange for your nanny to become
registered.

11. Conditions for the Scheme
Continued…
3. The scheme is only available to
employees and company directors.
Unfortunately the self-employed or business
partners do not qualify for the scheme

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. 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. 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. 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. Any Questions
• Please contact us at
• DIY Childcare Vouchers
• Andrew@diychildcarevouchers.co.uk
• Business Address – Ealing Studios, Ealing
Green, London W5 5EP
• Twitter - @diyvouchers
• Facebook DIY Childcare Vouchers