Childcare vouchers

Childcare vouchers

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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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Euan's picture
By Euan MacLennan
19th Dec 2014 17:36

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.

Thanks (1)
RLI
By lionofludesch
19th Dec 2014 18:07

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.

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RLI
By lionofludesch
19th Dec 2014 18:35

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.

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By SE
22nd Dec 2014 15:42

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

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Replying to penelope pitstop:
Euan's picture
By Euan MacLennan
22nd Dec 2014 15:56

A couple of thoughts

SE wrote:

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.

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By Gem7321
22nd Dec 2014 15:54

The excess is a BiK. 

The excess is a BiK. 

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By SE
22nd Dec 2014 16:46

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?

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Euan's picture
By Euan MacLennan
22nd Dec 2014 18:22

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!

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RLI
By lionofludesch
23rd Dec 2014 08:26

Agree

BIKs are not necessarily a bad thing.

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By SE
23rd Dec 2014 10:24

Childcare

Thanks

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