A Husband and wife company with Total Joint earnings of approx £40K pa, both husband and wife receive similar income.
Am I correct in thinking that with one child they will receive approx £545 Working Tax Credit. Currently paying just over £100 per week for Childcare.
So if the company contracts to provide chilcare to the employees then £50 per employee can be provided so they will get tax benefit of at least 19% or marginal rate, at £100 per week. Which is nearly double the WTC they will lose.
Seems kind of worthwhile, have I made a schoolboy error? Is there anything that I'm missing, or is there an alternative method that may be more effective?
All help appreciated
Thanks
Lee
Replies (2)
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Vouchers
Ok Thanks,
Although I wasnt really looking at using childcare vouchers I was looking for the company to contract directly with the childcare company, the first £50 per employee tax free, with any additional posted to directors loan account. Is it more beneficial to go down voucher route?
Lee
All seems correct..
The only real negative to using the childcare vouchers is the effect on tax credits so as long as the tax saving is greater than the loss of tax credit then everyones a winner.
Dean
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