vouchers - wth?

[bronnie98]

Can anyone help explain how the voucher system works? DH and I have just moved here from overseas and DS is going to childminder when I go to work. Someone recommended the voucher system but then I heard it is stopping? info on google incredibly confusing - can anyone explain in plain English?

On another note how expensive is childcare?!?!

Childcare vouchers are a Salary Sacrifice scheme which means that the vouchers come out of your pre-taxed pay from your employer. This saves you some tax and saves your employer a little as well. They have a maximum value. Your employer should have information about how the scheme works.

Vouchers can be used to pay your childminder, if you childminder is registered with the voucher company (many employers outsource vouchers to a voucher company who deals with payment).

Vouchers take time to clear into your childminders bank account. You may need to log in to an online system to authorise each voucher, or you may have an automatic system... it varies between the voucher companies. You need to know when you get the voucher and then how long it takes from you authorising that to your childminder actually getting the money. It can take over a week.

Childcare costs vary around the country.

Childcare vouchers are now closed to new users - if you are already registered then you can continue using them so long as you receive vouchers at least one month in the tax year. You get £240 a month if you are a basic rate tax payer or £120 if you are a higher rate taxpayer so the benefits are equal in terms of tax saved. Your childcare provider needs to be registered with OFSTED in order to accept childcare vouchers as payment.

Childcare vouchers are still going strong. They close to new applicants once the Tax Free Childcare scheme starts which is now not until sometime in 2017.