Tax credits - childcare element or salary sacrifice?

(8 Posts)
Solo Fri 18-Jan-13 12:49:15

I am back to work on Monday and I've been unable to find the answer anywhere else, so hoping someone can help.

I don't know anything much about childcare element of CTC, but I feel a bit vulnerable with the salary sacrifice as I work for the public sector and I feel that they might just not revert my salary once I no longer use child care, which I understand is their prerogative to do so or not. Basically, I don't trust them!
I should be earning around £31k gross and I could be looking at either £100 every 4 weeks or £148 per 4 weeks. This is for a breakfast club 5 mornings a week (and after school club 1 evening a week, which I may or may not need), more in the holidays.

Please help!!

TIA.

Solo Sat 19-Jan-13 09:55:35

Anyone?

Alibabaandthe40nappies Sat 19-Jan-13 09:58:37

Solo I've no idea, but I just wanted to wish you good luck on Monday! I'll be thinking of you.

Could you call CAB for advice?

StainlessSteelCat Sat 19-Jan-13 09:58:58

By salary sacrifice, do you mean childcare vouchers? If so, you deal with a third company that you pay the money to, and they then pass it on to the childcare provider. You tell this third party when you want it to start/stop, they keep the balance for you and pay it on to whoever you tell them to. I can't see how your employer could decide to keep the amount.

You may be better off using just tax credits to pay childcare, rather than vouchers - use tax office calculator or entitledto.com to help with that. I'm trying to figure out that problem for myself at the moment, and as usual running up against the problem that working out how much tax credits I'd receive depends on the phase of the moon, prevailing wind direction and tide height. Am not bitter wink but am fed up how badly the system copes with self-employed/freelance/temporary workers or anyone else who has a change in earnings!

StainlessSteelCat Sat 19-Jan-13 09:59:49

And good luck on monday smile

zookeeper Sat 19-Jan-13 10:01:33

hi Solo have you tried one of the online benefit calculators? There's a site called "entitledto" that has/had one I used a while ago - you can put in different figures and it will tell you what your benefit entitlement would be in each case.

mollymole Sat 19-Jan-13 10:02:20

I have not heard of 'docking' the salary when not needing the childcare anymore. How can this be correct when the 'salary sacrifice ' comes out of the Gross wages i.e.
Hourly rate = 10.00 35 hours worked = 350.00
Less salary Sacrifice 55.00
Pay for NI & Tax Purposes 295.00

It does not come out be lowering your hourly rate.

Solo Sun 20-Jan-13 01:20:02

Thanks everyone.

I too find the whole tax thing (and everything else!!) confusing and even the tax calculator seems to present me with brick walls.

I read the blurb on salary sacrifice and it basically says that you can do this and that your 'official salary' will be lowered by the amount you choose to put into the childcare vouchers, so that you are then paying the lower taxation on your lower salary making it your tax 'credit'. I may have dreamed (had a nightmare) about them not allowing you to resume your actual salary when ending the voucher scheme.
Being as I wont be entirely sure of my cc costs, I wonder if the childcare element of the tax credits would be the easier way to deal with them.

Thanks for the luck smile I need every bit of it!!

Join the discussion

Join the discussion

Registering is free, easy, and means you can join in the discussion, get discounts, win prizes and lots more.

Register now