Does your company offer childcare vouchers? Then you should know everything about this scheme so that you can take advantage of it. This scheme is very useful for working parents in the U.K. that benefits not only their children but also saves their money.
But, before becoming a member of any scheme, one must have complete knowledge of it. Thus, we have come up with answers to frequent questions that pop up in everyone’s mind who are eligible for the scheme.
FAQs On Childcare Vouchers Scheme
What Is The Scheme
The M.D. of the Luncheon Voucher Group, Sue Harvey, had introduced this scheme for the first time in 1989. The objective of the scheme was to allow parents to save money on tax and use that amount on childcare.
Only working parents are eligible for the scheme and sacrifice some amount of salary on childcare and get double benefits. They can save tax on the amount sacrificed for childcare.
The scheme is now closed for the new entries since 2018 after figuring out that high earners are more benefited from the scheme. Later, the scheme is re-launched with a new name, Tax-free childcare with an upper cap on the savings.
Now, as per the new scheme, the basic rate of taxpayers can have up to £55 per week.
This amount is £28 a week for high earners
£25 a week for additional rate taxpayers
N.I. is exempted from each category. The rate of tax will be decided by the employer after an assessment of the employee’s earnings. The assessment will include their commission, shift allowances, car allowance, taxable benefits, bonuses, and basic salary.
Tax exemption is not applicable to those who have not changed their job before 6th April 2011.
Do I Need To Apply For A New Scheme Even after Having Childcare Vouchers
If you already have a childcare voucher, then no need to apply. You will continue to get vouchers
till you work with the same company and your child is eligible. Even if you have applied for a tax-free childcare scheme, you will continue to gain the benefit. But in case you decided to leave the employment, you need to discuss additional conditions with your H.R. team.
In case your partner claims for a tax-free childcare scheme, then you will become ineligible for the childcare scheme.
What If I Leave The Employer
Leaving the employer with which you have signed the childcare scheme will automatically discontinue the scheme, and you can no longer join in with the new employer. In case you are switching the job via TUPE, then you can continue to gain the benefits of the scheme.
What Is The Use Of Voucher
You can use the vouchers to pay for the following care of your kid whose age is lower or equal to 15/16:
Pay for home-based care
Primary based care
After School clubs
You can even use them for paying for the care provided on-premises or outside normal school hours by the school’s governing body. However, you won’t get any refund for unused vouchers. Contact your employer for further details.