childcare voucher schemes

[titch]

Does anyone do this? We're looking into it for LO when I go back next year. My work do this scheme and the nursery we have him on the waiting list for accepts the vouchers; http://www.childcarevouchers.co.uk/Pages/Default.aspx

I was just wondering if there are any downsides. It says on the website it might affect your tax credits but because we cant claim until LO is born I dunno how much Ill get. The other obvious is that my pension contributions would be affected.

Anyone know how much of an impact this would have on the childcare element of working tax credits?

Thanks

 

[Rowesb]

We won't get much in the way of tax credits anyway, if anything now... I know a few people who do this and it does give you quite a good saving, if we do it though they will go through DH's wage so that it won;t affect any future maternity assessment for me

 

[titch]

^^ oh yeah good thinking!!!! Although...if I take a salary sacrifice to bring my salary below 10k will I be totally excempt from tax under the new budget?!

 

[Rowesb]

I have no idea about that, I guess the easiest way to find out would be to phone payroll

 

[Zazu]

I imagine your tax code will be adjusted as it will be seen as a benefit (like a company car, or a professional subscription), so you wont be exempt - worth looking into though x

 

[fairydust1984]

hi,

i am an accountant by trade and it def does not alter your tax code, you benefit as they deduct it out of your salary before they calculate tax so if this brings you income down to less than 7.5 approx (from April 2011 per new budget) then you will pay no tax as this is the personal allowance amount per person before tax is deductable i do this scheme and claim the full 250 per month i think it is and save approx £80.00 per month on childcare as i do not pay tax on the 250

Hope this makes sense and does not over complicate matters
xx

 

[Zazu]

hi,

i am an accountant by trade and it def does not alter your tax code, you benefit as they deduct it out of your salary before they calculate tax so if this brings you income down to less than 7.5 approx (from April 2011 per new budget) then you will pay no tax as this is the personal allowance amount per person before tax is deductable i do this scheme and claim the full 250 per month i think it is and save approx £80.00 per month on childcare as i do not pay tax on the 250

Hope this makes sense and does not over complicate matters
xx

Good to know x