Employee Benefits - Childcare Vouchers

How do they work?

Childcare vouchers effectively let workers swap untaxed income for childcare. Users pay no income tax and national insurance on the money they spend on childcare.  This is known as a salary sacrifice scheme.

The vouchers requested are deducted from your pay packet prior to National Insurance and Tax being applied so giving you savings.

In April 2011 the government brought in some changes regarding the Childcare Voucher Scheme for new employees only (please see table below) meaning that higher rate tax payers can now claim the lower rate of £124 per month. Higher rate tax payers joining the scheme before 6th April 2011 are unaffected, and can continue to claim the full £243 per month.

 Tax rate payable

Max weekly vouchers allowed

Max monthly vouchers allowed

 Basic rate (20%)

£55

£243

 Higher rate (40%)

£28

£124

 Additional rate (50%)

£25

£108

Employees electing to take £55 per week in Childcare Vouchers instead of salary could save up to £933 a year and employees electing to take £28 per week in Childcare Vouchers instead of salary could save up to £624 a year. 

How do I apply?

Many organisations offer a Childcare Voucher Scheme to their staff, so you should speak to your employer first.

If your employer does not run their own scheme, Bath and North East Somerset Council are able to offer our Childcare Voucher Scheme to a limited number of organisations, including other Local Authorities, not-for-profit organisations and designated public bodies under the Local Authorities Act.

If your organisation does not fall into this area there are a number of other voucher schemes available within the UK.

If you would like more information about the Bath & North East Somerset Childcare Voucher Scheme and how it can generate savings for yourself and your organisation please do not hesitate to contact us using the details on the left of this page.

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