Can anyone explain how child are vouchers work please?

[Connah'sMommy]

Not really sure how they work tbh

Not sure yet if OHs work offer them but I was wondering if they do would we be better off rather than using tax credits for child are costs?

Really confused soo if someone could give me an idea how they work that would be great x

 

[ClaireLouise]

I kind of know how they work (as I work at an accountants) but check this site hun, as it would explain it all better than me!

There is also a calculator to see if you would be better off using vouchers or tax credits xxx

https://www.hmrc.gov.uk/calcs/ccin.htm

 

[My_First]

Okay, so lets say your OH currently earns 5k, and gets taxed 20% (1k) (lets leave out National Insurance!), so he takes home 4k. Say you buy £200 worth of childcare vouchers, that will automatically be deducted at source, so technically he will 'earn' £4800, (you will get the other £200 in vouchers), but he will only be taxed on the £4800, making his tax to pay £960, so he will take home £3840 in salary BUT £200 in vouchers, (Total £4040) making him 'better off.'

No idea about the tax credits situation...

 

[Abz1982]

If you look on the entitled to site it will work it out based on using the tax credits and you can tell from that if its any better.

For my OH and I we both get £243 taken off before tax a month. This costs us in real terms about £179 so we save about £64 a month each.

Currently anyone can get these, and as long as it does not take y our wages below NMW then its OK to get the full amount. 40% tax earners can only get about £90 a month now.

For one child in nursery for 3 days a week it is I would say better to get vouchers. ALSO.........for the purposed of tax credits as well, if you both get the full amount then when calculating tax credits your income you use is the amount minus the voucher amount. So for us this year it takes £5832 out of our gross pay, so we are under the 32k limit for 2 kids.

Also, if his work dont offer them its easy to set up. They jsut need to call the provider and it actually costs the company less as they will pay less NI for the employee claiming the vouchers. OH work uses the Computershare ones, and my work is Sodexo.