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Employer Childcare Vouchers

(18 Posts)
Uwila Wed 22-Dec-04 21:02:18

Does anyone plan to take advantage of this scheme? Any views on it, good or bad? I don't think it will help us any because our nanny doesn't meet the qualification criteria, and I don't know if our employers participate in the voucher scheme. I wonder how many do?

Here is a description form the Nanny Tax website:

Employer-supported childcare vouchers
The Inland Revenue has recently announced that the tax and NI contribution rules for employer-supported childcare are changing from 6 April 2005. This means that all employed parents, irrespective of income, will be entitled to some financial relief under the new childcare voucher scheme that was announced in April's budget.

Parents will be exempt from both tax and National Insurance on the first £50 per week that each parent spends on childcare. This could amount to approximately £2,000 in annual benefit per family (if both parents are 40% taxpayers). The savings will be made through the parents' employment, and they will only be able to benefit if they work for a company that has implemented a childcare voucher scheme.

Under this scheme the amount to pay nanny will not change, instead her salary will be paid part as per normal and part in vouchers. Nanny will then cash the voucher in with a childcare voucher company.

The parents' own gross annual wage will be reduced by up to £50 per week, which means that they don't have to pay any tax and NI on that amount, nor will their employer. This should hopefully encourage more companies to set up and administer a childcare voucher scheme. However, parents should bear in mind that by reducing their gross annual wage any earnings-related benefits will also be reduced.

Whilst this recent Inland Revenue announcement is welcomed by most, nannies will need to be either registered or approved in order for parents to be able to benefit, and we are still waiting for the DfES to announce the results of their consultation Childcare: extending protection and broadening support. We will make sure to keep you updated.

Uwila Thu 23-Dec-04 13:57:25


CountessDingDongDrac Thu 23-Dec-04 14:17:04

I will if my firm are going to offer it. I think I'll email HR and ask.

Uwila, what are the qualification criteria for a nanny? I wonder if mine qualifies

binkie Thu 23-Dec-04 14:29:08

This looks ideal for us - thank you Uwila, am so up to my ears in work I had no idea.

CD, I've had a very quick look & the NannyTax website sets out some qualification criteria & forwards you to the Sure Start website which tells you how to get your nanny approved (which is part of the qualification criteria).

Uwila, is your problem that your nanny doesn't have a formal childcare qualification, so can't be "approved" per Sure Start?

CountessDingDongDrac Thu 23-Dec-04 14:30:13

dd going to nursery in March, so won't be a prob either way.

2k a year saving would pay for about 4 months of the childcare wayhay!

Uwila Thu 23-Dec-04 15:30:33

The first problem is that our nanny won't meet any of the qualification criteria. She is from Estonia. She has raised two children of her own. (I have met one of them and can say that she did a fine job as Mother). She also has a degree in education, one in veterinary medicine, AND one in nutrition. These experiences make her a positively splendid nanny. But, the government thinks she isn't "qualified". This is a real sore point for me. I will decide who is qualified to look after my children, not some beaurocracy of paperwork (that costs £96 to initiate).

Also, I don't yet know if either my or my husband's employers will be issuing vouchers.

Oh, and what about grandparent? How absurd is it that grandparents aren't qualified carers. This is not an issue for us because our parents live far away, and so don't look after DD. But, I'm sure there will be some deeply offended grannies out there -- and who could blame them?

DissLocated Thu 23-Dec-04 16:05:39

My company offers this scheme which I use at dd's nursery. The practicalities are a pain in the bum, the vouchers can take ages to arrive in the post making us late paying the nursery. Tried their electronic scheme but the website was pants, couldn't get it to run at home and at work was very slow.

Once the tax relief comes in, we're hoping dp's company will do it as he'll save shedloads.

I think grannies are included on the scheme though, I'm sure ours says they can be paid to relatives but not parents. (ie, Dad can't get the vouchers from his work and pay them to Mum)

Uwila Thu 23-Dec-04 16:16:29

Disslocated, are we talking about the same thing? This comes into effect on 06 April 2005.

DissLocated Thu 23-Dec-04 16:43:36

Yes, I think so. It's a salary sacrifice scheme, I opt to give up £450 of my salary per month and get £450 in vouchers instead. Because my salary's reduced I pay less NI, my employer also doesn't pay employer's NI.

I give the vouchers to my nursery, they get the money paid into their bank account.

In April the scheme is being changed to include tax relief but only up to £50 per week (currently there is no upper limit) When this happens, we're hoping dp's company will introduce the scheme (we've been badgering their HR dept, they're a very baby friendly company so hopefully they'll do it) then we can both get tax and NI relief on the £50 per week.

Uwila Thu 23-Dec-04 17:06:30

I can find nothing about grandparents from Nestor (the chosen approval body for this scheme). And anyone with a foreign qualification looks to have to attend their course. Looks like a lot of red tape and wee tiny bit of help for working parents.

\link {\qualifications}

Uwila Thu 23-Dec-04 17:07:12

I hate when that happens


Uwila Thu 23-Dec-04 17:12:49

When I started this thread I had a few doubts, but now that I've looked more into it I think it does more to generate income for Nestor than it does to save me any money. From the Nestor website:

Applicants who have lived abroad
Any evidence you produce from countries other than Great Britain must also be from a verifiable source and if necessary translated into English by an accredited translation agency, embassy or high commission.

However, due to the time it can take to verify the evidence you may wish to consider attending an acceptable induction and /or first aid course in England.

Yes, the more I think about it, this scheme is a gold mine for Nestor.

CountessDingDongDrac Thu 23-Dec-04 20:33:31

I guess that the nanny has to have a recognisable qualification or otherwise they could name anyone as the nanny and still claim the vouchers, tehn split the differenc e

Uwila Thu 23-Dec-04 20:41:20

I suppoes, but why don't they just ask me to prove that she works for me. Like a tax return, or a pay slip, or even the employment contract. I guess what irritates me here is that I have employed someone who is very capable, and the government thinks they have the authority to say "no, I'm sorry. Doesn't qualify." That's just rediculous. I never want to live in a world where the government gets to have more say than I do in who looks after my kids.

Oh, well. I'm just whinging I guess. They aren't going to change the rules for me. I should just accept it and move on. No tax break for us.

KatieMaChristmas Thu 23-Dec-04 21:23:03

The ICP (at the bottem) is only 20ish hours and can be combined with a first aid course (12 hrs I think)

So the qualification is quite easy to do....and short

CountessDingDongDrac Thu 23-Dec-04 21:36:59

She could always take a qualification Uwila - sounds like she doesn't have a prob with academic stuff to me and would breeze through!

LunarSeasonsGreetings Fri 24-Dec-04 09:26:34

Dislocated - the current scheme does include family members, the new one (from April) doesn't. We've been doing the current scheme (the Accor one) for the last three years, with absolutely no problems, and it looks like DH's company will start doing the new scheme once it comes in. It does seem though that it's taking employees to push the suggestion rather than companies offering it withit prompting in most cases.

Uwila Fri 24-Dec-04 09:48:05

But how in the world ca a 20 hour training course make some more qualified than someone who has been a mother? And WHY am I not the person most qualified to decide whther or not the nanny is sutable to provide my children's care.

The more I look at this scheme, the more I think it serves to generate business for Netor far more than it serves to help working parents. Nestor get to say whether or not you are qualified, and then guess who runs the course (and profits from it!). I's say this scheme has PROFIT written all over it for Nestor, and does only a wee little bit to help working parents.

Also, as the £50 per week is removed from your salary before the company pays taxes or benefits, and salary based benefits (i.e. pension scheme) are also reduced. So you aren't actually getting £2000/year. You are getting £2000 minus any benefits minus the cost of qualifications minus the £96 processing fee... and so on. What is the savings now?

And, I would probably have to pay the nanny to go on the qualification. She works quite a long day for me as it is. So I could hardly expect her to go on and take this course on her own time. I try to treat her as I would expect my employer to treat me. If my employer sent me on a training course, I would expect them to pay me for my time just as they would if I was at work. So, I feel that it wouldn't be right to expect any different from my nanny.

Basically, I think if you really take everything into account, this scheme costs me more than it saves me. The only peopl who profit are 1- Nestor, and 2- MArgaret Hodges because she APPEARS to be doing something for working parents. But she isn't really helping me at all.

No wonder people pay au pairs and nannies under the table when this is the best help the government can come up with.

I think all childcare (of any form the parents so choose) should be 100% tax deductible. If I want to hire Frosty the Snowman, I should be able to. Every penny of my income that I spend on childcare so that I can go to work should be exempt from tax... ALL of it.

Why am I the only one who is bothered by this? Are there silent lurkers on this thread? Or am I just exibiting my uptight type-a personality?

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