I am the only employee to take childcare salary sacrifice of £243 in a company.
Instead of using a scheme provider such as Computershare who charge (and wipe out any Employers NI saving).Can I jut write a cheque direct to nursery?
Is there a requirement to use a scheme provider? I can't see this anywhere as being a requirement. I will keep a copy of invoice etc.
Thanks for your comments
Replies (10)
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Directly contracted childcare
The employer can contract directly with the childcare provider. The evidence you need is an invoice from the nursery to the employer for £243 (with the balance being charged, presumably on a separate invoice, to you, the parent). If the employer receives an invoice addressed to the company, the company can then write a cheque on the company bank account (or make a bank transfer) direct to the nursery.
There is no requirement to use a voucher scheme.
Be aware that it will all change in October 2015.
Alternatively, you can print your own vouchers. No need to pay a scheme provider.
There was a thread on this a few months ago, which I'll try to find later.
Oh well
I found it - but for some reason, I can't cut and paste in the link.
:-((
It was a thread called, coincidentally, "Childcare Vouchers", started on 12 June.
Directly contracted childcare
I have a similar situation whereby the nursery invoices the company. However the company pays all of the invoice and I have just found out the amount is often >£243. My thoughts are to debit the excess to the DLA but I am unsure if this will cause any BIK issues- any thoughts?
Thanks
A couple of thoughts
I have a similar situation whereby the nursery invoices the company. However the company pays all of the invoice and I have just found out the amount is often >£243. My thoughts are to debit the excess to the DLA but I am unsure if this will cause any BIK issues- any thoughts?
Thanks
As you mention a DLA, I assume that the parent is a director and sole/major shareholder of the company.
is the other parent also a director? If not, why not appoint him/her and claim 2x £243 a month tax-free?the excess over £243 a month would be a BIK, on which only tax and Class 1A Er's NIC is payable. If you charge the excess to the DLA, the director would have to find the money privately out of income from which Ee's NIC has also been deducted.
Childcare
Thanks for your thoughts much appreciated. There are 2 directors and I have just been informed the average nursery bill is approx. £600. So this leaves £114 excess over the £243x2. So the DLA debit does not get round the BIK? Would paying pack the excess each month to date from the directors personal funds avoid the BIK as amounts >£243 would in effect be made good?
DLA & BIK
Yes - charging the excess to the DLA avoids the BIK, as would the parents paying it direct to the nursery or reimbursing the company. My point was that treating it as a BIK effectively saves the parents the Ees' NIC as they would otherwise be funding it out of taxed and NIC-ed income. Not a lot, but every little helps - particularly, when you have children!