Childcare Vouchers

Childcare Vouchers

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Hi

I need some help regarding my childcare scheme for my freelance limited company

I have run my own scheme and have vouchers for each payment of childcare over the past 2 tax years to a valid provider.

However, I note the actual payments have come from the employee bank account and not from the company account.

I think the employee is now liable for historical PAYE and NI contributions.

Can you confirm and what should I do next?

Replies (4)

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Euan's picture
By Euan MacLennan
05th Sep 2012 13:56

Please clarify

Are you both the employee and the limited company?

How have the childcare payments been reflected in the company's accounts for the past 2 years, if there have been no payments from the company bank account?

By vouchers, do you mean invoices from a qualifying childcare provider?

There is nothing to stop an employee paying for childcare, but it would obviously come out of the individual's taxed income and the employee would not get the tax-free benefit of employer funded childcare.

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By dvaughan33
05th Sep 2012 14:29

Hi Euan

I am the major shareholder in the limited company and the director.

The company made payments to the director as expenses for the childcare.

We have receipts from the registered childcare provider and I produced my own childcare vouchers.

What I understand is that if the company had paid the provider direct, it would be covered by the scheme, but it's not if I re-imburse the employee.

So, I'm not sure what to do about previous tax years

 

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Euan's picture
By Euan MacLennan
05th Sep 2012 17:18

No big problem

If the company reimbursed you for your personal childcare costs, it should have gone through the payroll, but it is too complicated now to change the figures for previous years.  The alternative is to charge the reimbursement of your childcare to your director's loan account with the company and not claim it as a business expense.  If the balance of your DLA remains in credit, there is no consequence.

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By dvaughan33
07th Sep 2012 12:14

Thanks Euan, you've been a great help.

I'll post this year's costs against the DLA.

 

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