Childcare Vouchers
What are Childcare Vouchers?
They’re a special government scheme operated through employers, which allows them to pay up to £55 per week towards approved childcare for each parent with a child aged up to 15 (16 with special needs).
What are the benefits:
Parents/Employees
Parents can make savings on childcare via this scheme as they are exempt from paying tax and national insurance on childcare vouchers (up to £55 a week or £243 a calendar month).
Childcare vouchers can be offered in three different ways by an employer:
- As a benefit in kind on top of the employee’s existing salary
- As part of a flexible benefits scheme
- As part of a salary sacrifice scheme (i.e. they give up part of their salary in exchange for vouchers)
Employers
Employers can make savings of up to 12.8% on national insurance contributions on the first £55 of benefit (voucher) paid each week, as well as saving tax on any additional costs incurred in administering the scheme.
Childcare Providers
Vouchers are simple for providers to accept, and can be paid directly into most bank accounts. They also allow extra flexibility for parents.
Accepting childcare vouchers is simple and there is no cost at all for the Provider. Providers need to register with childcare voucher organisations (a list of the main ones is provided below). Once registered, the parent can pay in vouchers (or a mixture of vouchers and their usual method of payment). Providers can redeem the vouchers with the relevant organisation. This can be done either by post or some operate a scheme where quote a unique reference number and payment is authorised immediately.
