Please give me the Government Childcare Voucher Scheme for Dummies!

[FullySwindonian]

Is any key working part time and claiming the government childcare voucher scheme and if so would they be prepared to divulge on here or in PM their total nursery fees before and after the vouchers?

I'm currently looking for work and am curious to know if this scheme will cover breakfast or after school club and school holiday play schemes. I have two infant schoolers under 7.

There seems to be very vague information out there other than (as my lone parent advisor also offered) you have to find an employer who actually runs the scheme in the first place (as not all employers do), the childcare provider must be Ofsted registered, then you agree to 'sacrifice your salary' or something like that and somehow the childcare schemes are paid.

How are they paid? Is it by direct debit from me, does the employer pay them direct, do they claim from the government? Or is it physical vouchers?

A really simple summary would be so helpful!
Thankyou

Hi yes you tAke the amount you need to pay each mont as a salry sacrifice so for example if your nursery fees are going to be £500 per month, over a year you are reducing your gross salary by £6000. So if you were on £26k, your salary and therefore what tou pay tax on will now be £20k. In terms of finding an employer who runs it, i wouldnt worry about that too much as my new employer did not have it and i suggested it to them. It is a win win for them as their national insurance contibutions for you will be less as a result, as per example above they were previously paying NI on your £26k salary and now will only pay NI contirubitons on your £20k salary. Even with the minimal asmin fee for running the scheme, all employers save money by having it, it does not cost them anything. I found it great as my student load reduced massively as a salary sacrifice. Only thing you have to be aware of is if apllying for mortgage etc, your salary is now lower, albeit temporarily for childcare. Hope that helps, depending on tax bracket you and/or parttner are in you can claim up to max £243 each of your wages so total £486, so based on nursery example above, you would only need to make up £14 cash difference direct to your nursery. The childcare voucher provider bills your employer for the amount of vouchers you want, once paid they forward to your nursery and your salary is deducted by your employers accountants, so you pay a great deal less tax on your gross wage too. If you go on listentotaxman website you can enter your salary and childcare vouchers etc and it will twll you monthly or weekly etc what your net wage will be. HTH x

Wow, thanks chocolate that's really made it clearer for me

Thanks for asking OP - I was looking for this info the other day as about to go back to work and was unsure what to ask!

Hi, sorry but Chocolate's summary is not actually totally correct. The most you can claim each month is £243 , so your salary sacrifice will be a maximum of £243 per month which = £2916 (presuming you are a single parent). So if you are on £26k, then you will still pay normal tax and NI on £23,084

Your employer will pay you your usual salary, less the £243, which is taken from your gross salary, not your net.

So basically you save the tax and NI on that amount each month.

Each month your employer will then pay your 'voucher provider', ours is Computershare vouchers, the £243 directly. You and your employer will have to open an account with them. Once they receive the payment from your employer, your account will show a balance of £243 which you can then set up a payment through that account to your childminder/nursery.

Hope that makes sense. I manage the childcare vouchers for our company so I know this information is correct.

www.computersharevoucherservices.com/parents/Pages/what-are-childcare-vouchers.aspx

How much are you likely to be earning?
There is one more complication - childcare vouchers can't be claimed alongside childcare tax credits you need to work out what your better off on I'm not sure where the cut over points are.

We have to make 4 payments to nursery: childcare vouchers from my work, childcare vouchers from DH's work, direct debit from our bank account to pay the balance on DS1's bill, dd from our account to pay the balance on DS2's bill......

If you earn under 42K, and claim the max £243 a month, you can save nearly 1000 over the year in tax and NI - so you get 243 to spend on childcare, but only see £175 disapear from your pay packet.

I reckon DS1 will cost, on average £300/month to cover before and after school, 5 days a week, and half the school holidays (other half to be covered by holidays). But the actual amount depends on the amount of school holidays that month!