If you're new to the world of childcare, you may of heard about childcare vouchers as a method of helping with the cost of looking after your little one. And you would be right! We've created a guide to teach you everything you need to know.
What are childcare vouchers?
Childcare vouchers are a Government-approved, tax-efficient way of paying for childcare.
It gives you the option of exchanging a certain amount of your gross salary for childcare vouchers, and the money that you exchange becomes tax free and exempt from National Insurance contributions. Over the course of a year you can save hundreds of pounds depending on which rate of tax you pay. Both parents can join the scheme and save more money between them. Your place of employment needs to be registered with the scheme so make sure to ask your manager for more information.
You can claim childcare vouchers for children up to the age of 16 but you must be the parent or legal guardian of a child to claim. You need to be earning at least minimum wage once the vouchers have been deducted and unfortunately you cannot claim if you are self-employed.
Where can I use my childcare vouchers?
All registered childcare providers can accept childcare vouchers as a method of payment, including:
• Nurseries • Nannies • Au pairs • Creches Childminders • Out of school clubs (such as Explore Learning) • Extra-curricular activities (such as music lessons) • Breakfast and after-school clubs • Holiday clubs or schemes • Activity holiday companies including Camp Beaumont and Kings Camps • Qualifying childcare offered by schools
How much money can I save?
If you're earning a 'Basic Rate' which is between £43,000 you can save up to £243 a month equalling £933 a year.
If you're earning a 'Higher Rate' which is between £43,001-£150,000 you can save up to £124 a month equalling £623 a year.
If you're earning an 'Additional Rate' which is above £150,000 you can save up to £110 a month or £623 a year.
How do I apply?
There are different brands of childcare vouchers out there, but your employer needs to be signed up before you can apply. Firstly speak to your manager to find out if your employer is already part of a childcare voucher scheme and if not, you could look into pairing them up with one. Some childcare voucher websites have a service where they will approach your employer for you.
To find trusted local childcare easily, visit www.childcare.co.uk
