childcare vouchers...clarification required

[MissyPie]

I am organising my DD's childcare for when I return to work and someone has mentioned to me that I am entitled to childcare vouchers.

My understanding is this....

If my employers employ 5 people or more then I am entitled to childcare vouchers. The cost of childcare will be deducted from my gross pay therefore is not taxed and this money is paid direct from my employers to my childminder....am i right??

Also, does anyone else use this method, I'd be interested to know how your employers reacted...I know it's a legal obligation but some employers may grumble about the extra admin, I know mines will.
Thanks in advance

I am fairly sure that this is not an entitlement - rather something which your employer may offer to its employees as a tax efficient way to pay for childcare - i.e. as an incentive to be family friendly and keep its staff happy. See

www.childcarevouchers.co.uk

We do it through DH's employer. They do it through an outside agency, so the company doesn't actually have any extra admin, IYSWIM. I don't think it's an entitlement though, I think a lot of companies sign up for them, but there are several different vouchers (ie some do Busy Bees, our is Sodexo)
Whilst our twins were at nursery, DH reckons it saved us about £100 per month in real terms.

Check it out with your employer.

If you got the vouchers, you would be in charge of the liaison with the childcare provider - i.e. handing over a paper voucher, or doing the equivalent via an online credit account.

On the employer side, they would make a deduction through payroll, before tax. Not every employer offers it though and I'm fairly sure it needs to be Ltd company ruling out many small businesses.

Thanks for your comments - I was under the impression that the employer had a legal obligation to offer this incentive, I'll check out the website and speak to my employers - seems like using an outside agency would be a good idea also.

Many Thanks :)

There are lots of external providers, I used Accor at my old company and my and DH Allsave.

missypie - another thing worth bearing in mind is that both parents can get vouchers - so get dp/dh/the kids' dad to look into it too.

Korrall, that explains the "voucher" part.

I work for a small Ltd company in Warrington and my employers don't seem to be very child friendly, they have hinted to me on many occasions how much of an inconvenience I am, It's always said in jest though and I tend to just let this go over my head - I know they would grumble about extra admin so knowing that I would be in charge of the admin etc is uplifting.

Thanks

hatwoman - good point, I will speak to dp about this.

btw - it costs your employer nothing - I got my previous employer to offer them - but it took a reasonable bit of research on my part and a bit of patience in explaining it all to hr who were reluctant at first.

It actually saves your employer money. Although they have to pay the Voucher Company a small commission, about 8% I think, what they save in not having to pay employers' NI on that chunk of your earnings covers this fee, and some.

You can save up to 243 per month each, there is q calculator on the website. It saves DH and I almost £2K a year so it's really worth trying to persude your business. Ask your childcare provider which vouchers they accept before you start discussing with your employer.
Good luck!

another good point treetrunk...I'm building up a case, because I envisage a bit of a fight on my hands.

I will have a look at the website when I have some quiet time to really take it in.

Thanks again all for your posts...most helpful

"I envisage a bit of a fight on my hands."

It's not really something you can have a fight about though. There's absolutely no obligation for your employer to provide a childcare voucher scheme. Your best bet is to get lots of the workforce to indicate they would take up the scheme, rather than just you asking personally for yourself, and demonstrate that the admin etc would be minimal, but that's it. Once you've done that it's up to them.

It's not the whole amount of the fees for the CM but it can be significant. Do be aware it affects your earnings and the amount you pay pension contributions etc on.

also you need to consider the effect on any child tax credits you may receive as the amount you pay for childcare that is taken into account in the tax credit calculation will be reduced by the amount of vouchers you receive. In certain circumstances this can make you worse off.

Thanks for all your comments, It appears now that DP will stay at home to mind DD (as his earnings per week equal that of the childcare fees) I earn just enough to keep us so no need for vouchers etc...

Thanks again, it gave me and DP a lot to talk about xx

Looks like you're sorted, but I had issues too with DH's employers, that I posted on here before about. They're a small company, and were very reluctant to sign up, even though I did research and printed off details of childcare providers. It came to a head when a senior colleague stepped in and pretty much told them to sort it, and said to DH that they spent way more time fobbing DH home than it took to set up the goddamn scheme.
They have since said it's very easy to administer. I really sympathise with anyone whose employers are being arsey about it - it's so easy to administer - if I could save somone £1k a year by doing less than an hours work, I certainly wouldn't have a problem with it.