Childcare Vouchers

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This is probably something that can’t be answered easily and could perhaps be circumstantial and based on each individuals job for example, but can somebody please explain to me how childcare vouchers work? And how much I can get? And also how much better are they than just getting a wage and paying for childcare out of my net wage?

Sorry but im just returning to work into a new job and know nothing about the scheme x

Are you still able to sign up for the vouchers? I thought they were closed now to new applicants and you need to use the new system of claiming back 20% of childcare. If you can signup, the vouchers are great. Easy to set up and use. There is a ceiling of how much can be take from your monthly earning dependant on your salary. So for me the maximum is £243. It's taken off my gross salary and therefore you pay less tax. Saves me around £100 a month. Definitely worth it. Find out which voucher company your employer users and call them with your employers schem no (HR can provide this). Unlike so many schemes I was pleasantly surprised at just how easy it all is.

You can sign up until April. The gov.uk website has a good calculator that will tell you if you are better off with the vouchers or the new tax free childcare scheme.

Your employer signs you up.

It’s salary sacrifice so max 243 comes out of salary, leaving you with approximately £60 benefit. Both parents can claim this so 120 benefit potentially.

You should look up the new tax free childcare. Sign up through government gateway. You put in 80p the gvt add 20p. Much more savings to be made this way.

Thank you all!

I was offered a job on Thursday and I start on 4th December but didn’t want to jump straight in asking about the vouchers - I know the employer offers them.

So if I earn £1400 a month and use childcare vouchers with £243 for example then it works out at £1400 a month-£243 and then I’ll be taxed on a wage of £1157 instead of £1400?

Would I get ‘paid’ £243 in physical vouchers to then give to a childcare provider or do I just not see that £243 and somehow that comes off my childcare bill?

Sorry for all the questions xx

It comes off your gross pay - so yes if the figure you mention is gross you'd have £243 less. If it's your net pay after tax etc you'll be about £180 down. It's all done electronically so you'll have an account with your employer's voucher provider and can set up regular do one off payments each month to your childcare provider.

Yes you get “paid” £243 usually in an electronic voucher account, then you can use the e-vouchers to “pay” your childcare bill, or part thereof. You AND partner can both claim and use vouchers at the same time.
A huge advantage of the vouchers to consider over the tax free scheme, is that you can accrue vouchers for up to 12 months, and some employers will continue to pay the vouchers during any subsequent maternity leaves giving you the chance to ‘save up’ childcare vouchers whilst on maternity (if you have reduced childcare costs) which you can then use on return to work. This is making a huge financial difference to us for our second child. Depends on employers policy about this though.

Ah okay that all sounds really positive! Thank you so much for all for your help! This is my first baby and first time looking at childcare and any help with costs as we’ve never qualified for anything. It’s such a mine field! Thank you so much for you advice, it’s been so helpful and really cleared things up :) xx

Do make sure you look at the new scheme though as many people will do better off than with vouchers.

Oh yes I’ll certainly look at both xx

Lots of settings are having problems with the tax scheme as they are not being paid on time. Check your desired setting is willing to take payment that way.

I shall indeed. I’ll make sure I know what they’ll be willing to accept and what my employer can offer etc. I think my partners workplace offers childcare vouchers too so I’m sure someone said we can both use childcare vouchers so will see how it all works out xx