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Original poster

Salary sacrifice and childcare vouchers

13 replies

wildstrawberryplace · 21/03/2011 13:08

Is this scheme not on any more? you know, the one where you could sacrifice some of your salary and get childcare vouchers instead, I think to a max of around £240?

Has it been cancelled by the gvt?

OP posts:

Ciske · 21/03/2011 13:09

It still exists, although I do believe it's changing soon where high earners can no longer claim the full £243. Just ask your employer if they take part.

irregularegular · 21/03/2011 13:11

You can still do it. I've just started it up again with my new(ish) employer who has just introduced the scheme.

The only change (so far) is that higher rate tax payers can't claim for as much as before. Though if you're already in the scheme by the end of this tax year you can keep the higher benefits.

meditrina · 21/03/2011 13:11

Link to current HMRC page about the scheme.

stealthsquiggle · 21/03/2011 13:15

It is being scaled down/ changed for new joiners (who are higher rate taxpayers) after 6th April this year, I think.

See here for one of the providers, which gives quite a good explanation

Original poster

wildstrawberryplace · 21/03/2011 13:28

Thanks

OP posts:

vezzie · 22/03/2011 21:46

Hi,
Thanks for the links.
I am about to go on maternity leave (technically on holiday) and I thought I should stop the childcare vouchers. Reading the link it seems I have got it wrong - because my employers have to pay the amount anyway, while I am receiving SMP, but without deducting it! - is that correct?

So I should keep it going, receiving paper vouchers instead of paying the childminder? (As my daughter is no longer at the childminder) - and stockpiling them for when I go back to work?

I know I should know this but my work HR never really explained how it works - I only found out about the vouchers by accident and I haven't really been formally introduced to it and it seems it changes my contract in a completely different way from how I thought it worked.

If anyone could explain I would be very grateful!

thanks
Deirdre

mranchovy · 22/03/2011 23:48

Yes that is probably correct, but...

What do you mean 'technically on holiday'?

Are your employers paying enhanced maternity pay or just SMP?

mranchovy · 22/03/2011 23:53

To be clear, the change is that employees who join the scheme after 5th April 2011 and pay tax at 40% will only get tax relief at 20%.

It is the budget tomorrow though, so things might change...

mranchovy · 23/03/2011 00:03

Actually the second question is not really relevant.

The employer must continue to provide all contractual non-cash benefits (which will include salary sacrifice childcare vouchers) during the 26 weeks of Ordinary Maternity Leave and the 26 weeks of Additional Maternity Leave.

vezzie · 23/03/2011 07:17

Thanks, mranchovy!
I just meant that my mat leave starts in two weeks and i am on 2 weeks annual leave till almost my due date.
thanks for clarifying for me.

mranchovy · 23/03/2011 14:28

Oops, what I said about the change is not right. The change for those registering in the scheme after 5 April 2011 is that higher rate taxpayers can only receive £28 per week of tax free vouchers (and additional rate £22 per week)

fjjprecious · 27/03/2011 15:26

I am going on maternity leave for 2nd time in May and was going to cut down my daughter's nursery days to save a bit of much-needed cash, but discovered via a friend that my employer has to keep maintaining the voucher payments for the duration of my smp leave, i.e. the £140 I was claiming via salary sacrifice for the vouchers will still be paid with no loss of income to myself. The obvious course of action it seems to me is to therefore increase my voucher claim to the full £243 ... seems too good to be true but when I called my employer's voucher provider a rather coy and giggly lady at the end of the phone confirmed there was no reason not to do this, so of course I have!!!
It's not often you get something for nothing but is apparently the case here, brilliant! Still don't quite understand it but so far so good ... Employers don't seem to advertise this for obvious reasons, so it's up to us to spread the word!!

TaurielTest · 27/03/2011 15:38

Yes, I too was tipped off about this. Since employers can neither make deductions from SMP nor vary your Ts and Cs, they have to make the contributions on your behalf once your mat pay drops to SMP only. I joined the scheme a month before I went on mat leave, at the full £243 level - I paid in for a few months, and now they are paying in. It's all just going into a pot for now, as DSs are not yet at nursery.
Some employers apparently try to get round this by telling people they have to leave the scheme if they're going on mat leave, but mine gave me no trouble.

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