Childcare voucher scheme
The Childcare Voucher Scheme is a UK government initiative aimed at helping UK working parents to benefit from tax efficiencies in order to save money on childcare. Childcare Vouchers can be used for childcare, au pairs, after school clubs, and any other registered childcare providers. The scheme is offered as a salary sacrifice scheme, which means that UK parents who are in the scheme are able to sacrifice part of their salary in order to obtain childcare vouchers (of an equal amount). In doing this the parents do not pay any tax or national insurance on the amount contributed to the childcare vouchers scheme up to specified limits.
Basic rate taxpayers can have up to £55 a week (£243 a month) tax and NI exempt. Higher rate taxpayers can have up to £28 a week (£124 a month) tax and NI exempt. Additional rate taxpayers can have up to £22 a week (£97 a month) tax and NI exempt. The restrictions only apply to those who joined the scheme on or after the 6th April 2011. Those who were already receiving childcare vouchers on this date can receive £243 a month tax and NI exempt until they stop receiving vouchers for longer than 12 months, change employer or no longer qualify for the scheme.