tax credits versus child care vouchers

tax credits versus child care vouchers

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where owner director has option of providing vouchers to himself for childcare is he/she likely to lose out more on tax credit claim?
nick farrow

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By robindunne
29th Jan 2009 11:02

No
Child care vouchers are excluded from income for tax credit purposes. See here:

http://www.hmrc.gov.uk/manuals/tctmanual/TCTM04225.htm

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By AnonymousUser
29th Jan 2009 21:20

by the same token ...
... where childcare costs are funded directly by the employer, the employee cannot claim for that element as qualifying childcare costs in the WTC claim. This is pretty obvious, really, but is in black and white in page 4 of WTC5:
http://www.hmrc.gov.uk/leaflets/wtc5.pdf
So the sums can get a bit messy, when you consider that the income may be disregarded for a year depending on adjacent years' income, the claimant may or may not be in the "fast taper" range of income, and may or may not have an equity interest in the employer. Last time I did the sums for someone it came out best not to provide the vouchers, but it may vary by case.

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By nick farrow
29th Jan 2009 11:32

many thanks Robin & TFAS

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By AnonymousUser
28th Jan 2009 22:28

Try...
the following website:

www.entitledto.com

It will look at whether it is better to put in a claim or provide childcare vouchers.

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