TO HELP PARENTS GET BACK TO WORK AFTER HAVING CHILDREN, THE GOVERNMENT ARE PROVIDING SOME HELP WITH THE COST OF ‘APPROVED’ CHILDCARE IN THE FORM OF CHILDCARE VOUCHERS, TAX CREDITS OR THE TAX FREE CHILDCARE SCHEME.
PARENTS CAN CLAIM UP TO £2000
How do I find a childcare scheme?
In the first instance you will need to find a scheme that suits you depending on the ages of your children and the amount of childcare you require. Take a look at your CHILDCARE CHOICES.
Who can get the vouchers?
Working parents can claim up to £2000 in Childcare Vouchers and if both parents’ employers offer the vouchers, both parents can claim the same amount. The amount that you are able to claim is dependent on how much you earn.
How do the vouchers work?
You can use Childcare Vouchers to pay for many different types of childcare, including ‘approved’ nannies. Only Ofsted registered nannies can receive the vouchers. You can find out more about how your nanny can register with Ofsted here.
Childcare vouchers are made up as a portion of your gross salary and are taken as a salary sacrifice. This means that a smaller portion of your salary is taxed than normal and there is no tax paid on the voucher. This means that once you’ve received your salary and paid your nanny you will have more money left over.
What can I use Childcare Vouchers for?
To pay your nanny with Childcare Vouchers, you will need to approach the HR department at your work and ask to start claiming the vouchers. Your nanny will need to register with the voucher provider, and the vouchers will make up a portion of her net salary. Vouchers are provided either as physical paper vouchers, which you will need to give to the nanny, or as electronic vouchers which will be paid over to the nanny automatically.
Step by step guide – claiming childcare vouchers
- Check that your nanny is Ofsted registered
- Approach the HR department at your work and request the vouchers or follow HMRC links to apply via the CHILDCARE CHOICES page.
- You will be sent a ‘welcome pack’ by the voucher provider, including a registration form for your nanny
- Your nanny fills out the registration form and returns it to the provider
- You will start to receive either paper or electronic vouchers
- Deduct the value of the voucher from your nanny’s net pay and pay her the rest as normal
- Enjoy the money you’ve saved!
What is Tax-Free Childcare?
Tax-Free Childcare is a new government scheme that will be available to around two million working households to help with their childcare costs.
From early 2017, working parents with children under 12 (under 17 for disabled children) can set up an online childcare account to pay their childcare providers directly. For every £8 parents pay in, the Government will add £2, up to a maximum contribution of £2,000 per child, per year (£4,000 per year for disabled children).
To qualify, parents must be in work and each earning at least £115 a week and not more than £100,000 per year and nannies must be registered with Ofsted.
The importance of Nannies and other childcare providers have a pivotal role in Tax-Free Childcare – if they don’t sign up, parents won’t be able to use Tax-Free Childcare to pay them. BUT they must be registered with Ofsted in order to be able to sign up for Tax-Free Childcare.
The Government will write to all registered childcare providers in September and October, asking them to sign up to Tax-Free Childcare.
For more information on Tax-Free Childcare visit TAX FREE CHILDCARE NEED TO KNOW and HMRC CHILDCARE CHOICES web pages.
If you’re a registered nanny, look out for Tax-Free Childcare – you’ll soon receive a letter from the Government containing more information so take a few moments to read it.
If you have a nanny who is not yet an ‘approved’ childcare professional, please take a look at our guide to BECOMING AN OFSTED REGISTERED NANNY
