Can anyone give me the lowdown on childcare vouchers?

[startagain]

how do they work? Is it a tax relief thing, or are they actually vouchers to go straight towards childcare?
My husbands employers offer this, have asked them for some details, but a bit impatient!!

You salary sacrifice up to £243 from your GROSS salary per month. This goes into an account with the provider and you can then use this to pay part/all of your childcare costs. So you can pay £243 in childcare, but as this was from your gross salary it is like it was only £150 net (if you were a higher rate tax payer)

It isn't actually a paper voucher - you just electronically transfer the money from your account to your childcare provider's account.

It is totally worth signing up for if your DH can!

More [[http://www.moneysavingexpert.com/family/childcare-vouchers here]

www.moneysavingexpert.com/family/childcare-vouchers even! Sorry This makes a good point about if you receive childcare tax credits then it may not be worth doing the vouchers, but otherwise it is a good thing

So, Ds now goes to nursery a couple of afternoons a week and we just pay directly to nursery.
If I went fulltime, and DH signed up for this, say childcare is £1000, he would get £243 of that paid, but really only pay £150. That's just shown in his paypacket? The nursery doesn't get paid directly from his pay?

So you would pay them £243 via the voucher provider account and the remaining £750ish via your own bank account.

If your company also offers vouchers then you can take advantage too. So you would pay £243 via that account, your DH would, and you would top up with the remaining £500ish via your own bank account.

You can bu the way only sacrifice the whole 243 quid if thast sacrifice doesn't drop you below minimum wage. Until his recent job change my husband could only sacrifice £200 quid as he wasn't earning enough to get the full benefit. What a bonkers system.

there are various voucher processing companies who basically act as a go between. your work sends the money to them and they send it to your nursery. on your payslip it will say something like 'childcare voucher' as a deduction. and on your bill from the nursery it will show the deduction they have received from the processing company, you just pay the difference.

It's shown in your DH's paypacket and goes to the nursery. You pay whatever your fees are over and above the £243.

Worth also saying that if your DC only goes to nursery a couple of afternoons a week it's still worth doing the vouchers - if it's less than £243 a month, you can choose to have however much you need to go to your childcare provider (say £130 for example) and the rest of your DH's husband gets paid into his account normally. Basically means you get your childcare tax free (which it all should be anyway in my opinion but that's a different thread!)

Just be aware of all of the ramifications of childcare vouchers,

• not all providers will take them (although most will)

• will probably affect your tax credits that you are entitled to.

• may affect your entitlement to state pensions etc

Not everyone is actually better off with childcare vouchers so make sure you do your research - there are various calculators out there.

In addition to ItsAllGoing's point, as it is salary SACRIFICE, always take into account any thing that is based on your salary. Tax credits, Pension payments, bonus payments etc. I used to get a 10% bonus every year and have a non-contribituary pension. I would have been WORSE off overall with the vouchers.

contributary

I use the system. I basically chose how much I wanted to sacrifice and it goes directly to the organisation who deals with it before tax and then I send electronic payment to my childcare provider. It works well for me.

I'm the same as Curlymom.

And even though my youngest will start school this yr i'm going to continue the salary sacrifice as its the only tax break i'm entitled to and you can still use the vouchers to pay for after school & holiday day camp care.