Self employed and want childcare vouchers?

[tabouleh]

There are some questions to David Cameron on the live webchat asking about whether child care vouchers will be expanded to the self employed.

I want to draw to people's attention that it is possible to set up a Ltd company to employ yourself and then to use childcare vouchers that way.

Under the new companies act you only need 1 director - and you can be the sole director and employee.

I've noticed a few people posting about self employed child care vouchers so I thought I would start a thread about it here. I will try to expand further and add some links in.

Thanks tabouleh - last time I looked at it it really wasn't worthwhile for me (I work max 2 days a week as a sole trader, so income levels are not huge ) - but would be interested to see if anything has changed.

I do this - I am the director and my DH is secretary. I'm the only employee and DH dosn't take anything out of it.

I didn't realise you only need one director now.

deepdarkwood - the benefit for me is the savings on NI and tax, but I work full time. If you factor in tax credits as well it may well be worth your while. Fortunately my DH's best friend is an accountant so I got some good free advice on the best way to go.

Duh - I don't need tax credits I mean childcare vouchers!

There is some info here on the HMRC website about childcare vouchers - specifically at the very bottom of the page about small companies.

For nickelbabe:

Private companies: The Companies Act 2006 requires a private company to have at least one director. A company?s articles of association may impose a higher minimum requirement for the number of directors. At least one director must be an individual. A private company does not need to have a secretary if a company?s articles of association provide for it to have a secretary but it must have a secretary if this requirement is included in the articles of association.

(Taken from the companies house website)

For self-employed people who would be caught by the IR35 legislation it is not so simple and you should seek advice from an accountant.

Agree about potential difficulties re IR35.

However, if people who might be caught by this if they set up a Ltd company are currently operating as a sole trader then the companies/people contracting with them ought to be worried about a deemed employment contract with said sole trader...

Yes, that's a good point!

I had a look at this a few months back. But as I understood it there was not really any benefit for one person microbusinesses where the person running the show was taking only a small wage from the firm and the rest in dividends ... because you'd have to raise your salary to accommodate the requirements of the voucher scheme ie what you gain on the one hand you lose on the other.