How do these work?? Child care vouchers, child benefit , working tax credits

[SusanaD]

My work place offers child care vouchers, and I've signed up for them. I've been told its beneficial to have these, only problem is - I have no idea how these work. Ok, i understand I sacrifice part of my salary - then what? My Lo is 4mths, and I plan to only return to work when he's about 9mths which is when I will place him in child care. So whats happening with these voucher things till then and what happens after I put him in child care?

Can I claim for child benefit and do this child care voucher thing? And whats the >GBP50k income ceiling thing? A part of our joint income is variable (ie tips , commissions etc). What happens to the child benefit amount if our annual income happens to touch GBP50k? Do we have to declare it or will HMRC just take back what they have to?

Is everyone eligible for working tax credit?

Working tax credit is only available for low income families, you won't get in on family income over 25k I think, child tax credit is higher, but not much.

Child benefit stops if one of you hits upper tax threshold, if your joint income is over 50k but neither of you is paying higher rate tax you get CB

Childcare vouchers are paid directly by the scheme to your childcare setting.

Basically the childcare vouchers are deducted from your pay packet so you don't pay tax or national insurance on that bit, which saves you some cash overall.

You can start getting the childcare vouchers now and build up in your account until you are ready to put your LO into nursery. Then just use them to pay the nursery fees. You have received log in details from your childcare voucher provider so you can check how much is in there and set up a standing order to the nursery when you are ready to start paying. It might be an idea to talk to the childcare voucher provider so you understand what it is you have signed up for and how it works.

Child benefit doesn't automatically stop if you go over the threshold. You have to tell HMRC and then pay it back via a tax return. You don't lose the whole thing right away- you lose a portion over your CB depending on how much over the threshold you are. Once you hit a certain level of pay (I can't remember how much, £60kish, I htink) then you lose it altogether.

You can't get the child care vouchers and then claim the child care component of tax credits. It's one or the other I'm afraid.