salary sacrifice childcare vouchers

[alecstilleyedye]

anyone use them? both wife and i are eligible, but will it be worth it?

two primary school kids at after school club...

 

[Bonefish Blues]

Tax free childcare purchase is better than paying for it from net pay ie after tax. That's about it.

 

[bikingdad90]

I use them.

It depends if you are basic rate or higher rate tax payer as the basic get a maximum of £243pcm and the higher £144pcm. You then save the tax and NI.

Me and my wife both get vouchers and we save £944pa each on the fees so it is considerable. The saving each year cover the equivalent of a months fees.

The big thing to watch out for is the change which comes in April 17. The government is closing salary sacrifice childcare vouchers to new comers and opening the new government help scheme where they add £20 onto every £100 sacrificed. The new scheme gives lower savings but anyone can join. If you join before April you have the choice to stay on salary sacrifice or switch.

 

[bikingdad90]

The vouchers can be used to pay for after school clubs as long as the club is a registered provider of childcare and they will accept payment from a third party.

 

[alecstilleyedye]

i take it if only one of us does it that it doesn't matter who (wouldn't make either of us go beyond the minimum wage threshold)…

 

[bikingdad90]

Correct unless one rather than the other will achieve a greater saving. Say one is in the 40% tax bracket and the deduction will bring them down into the 20% tax bracket saving then more then having the vouchers in the one who only pays 20% tax.

 

[User482]

anyone use them? both wife and i are eligible, but will it be worth it?

two primary school kids at after school club...

I've used them for years. If you're a basic rate taxpayer, then it's roughly a saving of 1/3 so it does add up. I guess if it's just for after school club then the £243 threshold isn't an issue (it doesn't go very far at a private nursery!).

 

[Beebo]

I used them when my kids were young. It seemed like a no brainer at the time.
The rules were quite strict, you had to enter the scheme and exit the scheme at fixed dates and couldnt make changes mid term.

 

[Sandra6]

You need to check the after school club is registered with ofsted, some that are run by schools aren't.
Also that they accept this form of payment, they need to be registered with the right third party company.
It can work well, or it can be a nightmare. It doesn't hurt to check it out though.