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Childcare vouchers and tax credits

(4 Posts)
fifitot Fri 14-Jan-11 19:28:11

I get child tax credits and can also claim for vouchers from work via salary sacrifice. HMRCC have told me if I get vouchers can only include the childcare costs after the voucher in their calculation for the credits. I find this strange as it is still money I am paying out.

Not sure if I am better off claiming the tax relief from the vouchers or getting the tax credits without them. V confusing?

Anyone any experience on this??????

Morph2 Fri 14-Jan-11 21:14:08

what they are saying is correct, in certain circumstances you can be worse off by claiming the childcare vouchers as you end up losing more in tax credits than you are saving in tax and NI through having the vouchers. This varies depending on your individual circumstances ie. what salary you are on, how much tax credits you are receiving etc so its impossible to say which is better without having all of the information. You will need to work out each way and see which way you are better off

HappyMummyOfOne Sat 15-Jan-11 09:44:44

They are right, you cant claim tax relief via the voucher and then tax credits on the same amount or you benefit twice - has to be one or the other.

If your income is low enough for tax credits to pay you the childcare element then its rare that vouchers make a greater saving.

fifitot Sat 15-Jan-11 10:38:17

Thanks for your help. Will have to work it out.

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