A new client has set up a company in Nov having been an PAYE with a third party employer before this. Overall earnings in this tax year will fall within the basic rate band but the client doesn't wish to draw a salary from the new company in the current tax year so no PAYE scheme has yet been registered. The client's just emailed me about setting up a directly contracted childcare voucher scheme (under which she would qualify for £55/wk on the income limits).
From what I can see, childcare is only reportable where the amounts paid by the employer exceed the specified limits. Is the company able to enter into a contract for childcare paying within the limits, without having to register for PAYE. This wouldn't have been done under a salary sacrifice so there aren't any payroll implications that I can see. My gut feeling is that is that the company will need to register for PAYE, although I can't see anything in the HMRC guidance (as below) that explicitly refers to a PAYE scheme.
To qualify for the tax relief, four conditions must be met:
A. the childcare voucher or directly contracted childcare relates to care for a child
(a) is a child or stepchild of the employee and is maintained (wholly or partly) at the
employee’s expense, or
(b) is resident with the employee and is a person in respect of whom the employee
has parental responsibility.
B. the care must be qualifying child care.
C. the scheme must be open -
(a) to the employer’s employees generally, or
(b) generally to those at a specific location,
(but where the scheme is provided through salary sacrifice or flexible remunerations
arrangements, this condition will still be met if the scheme is not available to
employees with earnings at or near the national minimum wage).
D. for employees joining schemes on or after 6 April 2011 that an estimate of the
employee’s relevant earnings amount for the tax year must have been made at the