Since 1989, the childcare voucher scheme has been in place to help working parents save money on childcare. It involves sacrificing salary in exchange for the vouchers. The working parent is then assessed for tax and national insurance on their remaining salary and receive the childcare vouchers tax free.
What does this mean for you if you need childcare? Well, if you’re a working parent then you could be saving up to £933 in tax and national insurance a year.
Many attempts to either amend or close down the scheme have been made. In 2009, the Gordon Brown government looked to close the scheme down but backed off and in 2011, the coalition cut the tax savings for high earners. The current minority government are looking to stop entry to the voucher scheme after October 2018.
But how do you know which is best for your situation? You need to consider a number of factors; are one or both parents claiming, total earnings, age of children, number of children and whether the child or children has a disability.
So, if you are a Company Director and want to check out what savings you could make then get in touch with an accountant. Preferably one who likes tax.