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Childcare vouchers - cover nanny's net pay, or gross pay?

(16 Posts)
keepmumshesnotsodumb Wed 15-Jul-09 16:52:11

Message withdrawn at poster's request.

nannyL Wed 15-Jul-09 17:19:19

i have no idea but my boss uses busy bees to pay me... obviously my full salary is no where near covered but it does go directly into my bank...
i cant see how it could be given to inland rev...
i guess the way around it it to use it to cover her expenses? and then top up expenses as it might well be more than £12 a week.

if you child is at nursary / CM then you could pay your nanny with some of the value and put the rest towards another ofsted registered child care place.

nannynick Wed 15-Jul-09 17:27:41

You won't be able to give HMRC childcare vouchers to cover the payments you make to HMRC for Employers NICs and tax/nic deductions on behalf of your nanny.

I don't feel it is reasonable for an employer to overpay an employee on a regular basis, which is what I think you are asking to do.

Is it viable for both you and DH to be on salary sacrifice schemes? (Look into pension arrangements, bonus schemes, anything work related to income.) Will you be using any other forms of childcare... for example pre-school?

nannyL Wed 15-Jul-09 17:36:49

good point Nick

I know where my Dad works he can choose any amount up to the maximum £243 a month, so perhaps one of you could just get £200 a month which would then cover your nannies net salary and pay her tax / NI and your employers NI with your own money?

keepmumshesnotsodumb Wed 15-Jul-09 19:37:20

Message withdrawn at poster's request.

nannynick Wed 15-Jul-09 19:58:27

To save some money, could you not use another PAYE payroll company rather than Nannytax (or are Nannytax doing you a special deal)?

Can't think of any ways to resolve the voucher issue. One day of childcare in itself is not enough to use the maximum voucher value.

chandellina Wed 15-Jul-09 20:55:39

isn't there some minimum threshold where you don't even need to pay her tax at all?

from HMRC site:

Do you always have to operate PAYE?

If this is your employee's only job and you pay them less than the NICs Lower Earnings Limit (LEL) - £95 a week or £412 a month (2009-10) - you won't have to operate PAYE at all.

If it's their only job and you pay them at or over the LEL but below the Earnings Threshold (ET) for NICs - £110 a week or £476 a month (2009-10) - you won't have to operate PAYE on their earnings but you'll have to keep a record of their personal details, their National Insurance number and the amount you pay them.

If they have more than one job, you'll need to operate PAYE. You can use the Simplified PAYE Deduction Scheme if their earnings are below the thresholds described earlier.

chandellina Wed 15-Jul-09 20:59:03

sorry, maybe it's not relevant if she (presumably) has other work. Not sure if the Simplified PAYE scheme has any monetary benefit compared to the regular one.

AtheneNoctua Wed 15-Jul-09 21:32:47

You could pay her the full amount of the vouchers and then work out how many babysitting hours she owes you in return, and then every now and then cash in on the babysitting hours.

keepmumshesnotsodumb Thu 16-Jul-09 09:25:07

Message withdrawn at poster's request.

Blondeshavemorefun Thu 16-Jul-09 10:32:40

surely if she doesnt earn as much as the vouchers are worth, then you cant use all of the voucher?

she def shouldnt have to owe/pay you back money/hours

or am i being blonde grin

SOLOisMeredithGrey Thu 16-Jul-09 10:39:03

Goodness! if you could claim all that money in vouchers, I'd be able to afford to go back to work! and many others would too I think. hmm

I think you have to produce proof of what you are paying out in some form or other don't you? or are my grey hairs really blonde?! wink

chandellina Thu 16-Jul-09 12:05:47

the vouchers are a drop in the ocean, IMO. The benefit is that they are pretax - your employer is not handing you £55. So a normal rate taxpayer shaves £15.40 off their childcare costs. x2 if your partner gets them too. (£22 if you are higher rate taxpayer)

I'm looking at spending as much as £425 gross a week to have a nanny just three days.

MrAnchovy Thu 16-Jul-09 23:44:37

This is a really unfortunate situation. It is certainly the intention of the scheme that you should be able to use the vouchers to offset the full (gross) cost of your childcare. But the way the voucher system and PAYE are set up, it is not going to work properly for you.

So you need some other ideas...

Unfortunately I think the idea of paying her more than she is due via vouchers and her paying it back is probably not allowed within the scheme.

If you are going to be paying her additional sums for babysitting, Christmas bonus etc. you can save value in the voucher scheme to use for this.

I assume the reason you are deducting £30 PAYE is because she has a BR tax code because this is a second job. Although I wouldn't normally recommend this, you could ask her to get a tax code split. If she had £112x52 of her personal allowance allocated to you, PAYE would be minimal (just a small bit of NI) and she could take all of the voucher amount.

I wish there was a better way, because tax code splits are a real pain, but I can't think of anything else.

SOLOisMeredithGrey Thu 16-Jul-09 23:46:07

Well, I'm looking at around £1600+ for a childminder too chandellina. It isn't cheap which is why I'm not at work atm.

littone Fri 17-Jul-09 00:20:43

My company provides using Accor for electronic vouchers. The £243 per month goes into a pot and I decide how much of that goes to nursery each month. If I did not payout the same amount it would just sit in the pot (Accor electronic vouchers never expire) so I can use them at some point in the future eg if I increase my childcare requirement or want to use them to pay for holiday clubs. If I want to leave the scheme and I have money in the pot it will be taxed and then returned to me.

So what I am trying to say is you should be able to chose how much money you pay to your nanny via the voucher system and how much you pay in cash. If you can both afford to pay claim the full amount I would and it can build up nicely for future use.

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