Childcare vouchers

[Mummy Bean]

Just wondering does any one get childcare vouchers through their work? If so how much does it save you on average?

Just trying to work out childcare costs and so far it seems SOO expensive.

 

[bec01]

Yes me and OH claim them. We've worked out that roughly £140 worth of vouchers costs £100 in terms of net salary reduction. Do you know which scheme your company use? The one we use has a calculator on the website which shows you how much you can save.

 

[Abz1982]

I have the calculations at work but jointly we got £5832 of vouchers a year and it was the equivalent of them giving us like jsut over 2k.

However the new scheme that is coming in worked out to be better

 

[Wriggley]

They do this at my OHs work but apparantly it can mess your Tax credits up?

 

[Kay_Baby]

Both me and OH get them through work. I get £243 and OH gets £124 a month and we both make the same saving as I pay basic rate and OH pays higher rate tax. The way they work is that the only saving you make is tax you would normally earn on that money.

One big advantage of Childcare vouchers that I have been taking advantage of recently is that your employer has to keep paying them out of there own pocket if you are ever just on statutory payments. It meant I have been sending my eldest to nursery still while on maternity leave.

I'm not sure if it would effect tax credits as I have never used them.

 

[Abz1982]

They do this at my OHs work but apparantly it can mess your Tax credits up?

In a way....

In our case we take our total childcare for the year - Approx 17000 and take away the voucher amount - 2916 x 2 peoples(or whatever you receive).

So we have 11465 a year child care costs. This is the amount you can still claim tax credits for

You also reduce your PRE tax and NI salary by 2916(or whatever you receive). THAT salary is what you give to the Tax credit peoples.

 

[Wriggley]

They do this at my OHs work but apparantly it can mess your Tax credits up?

In a way....

In our case we take our total childcare for the year - Approx 17000 and take away the voucher amount - 2916 x 2 peoples(or whatever you receive).

So we have 11465 a year child care costs. This is the amount you can still claim tax credits for

You also reduce your PRE tax and NI salary by 2916(or whatever you receive). THAT salary is what you give to the Tax credit peoples.

im confused lol

does it effect just the childcare element of tax credits or the child tax credit too?

im currently looking for a job myself so we are not entitled to child care element yet and from what ive read if my OH does the childcare vouchers we would pretty much loose our CTC?

until i get a job we rely on that

 

[Abz1982]

They do this at my OHs work but apparantly it can mess your Tax credits up?

In a way....

In our case we take our total childcare for the year - Approx 17000 and take away the voucher amount - 2916 x 2 peoples(or whatever you receive).

So we have 11465 a year child care costs. This is the amount you can still claim tax credits for

You also reduce your PRE tax and NI salary by 2916(or whatever you receive). THAT salary is what you give to the Tax credit peoples.

im confused lol

does it effect just the childcare element of tax credits or the child tax credit too?

im currently looking for a job myself so we are not entitled to child care element yet and from what ive read if my OH does the childcare vouchers we would pretty much loose our CTC?

until i get a job we rely on that

He cant get them unless you have a child IN childcare...but you can keep getting them if your child leaves child care adn you can bank them - I think its a year they last.

His INCOME for tax credits would go down if he gets the vouchers. You do NOT need to tell them you get vouchers. You just need to give them the salary minus the voucher amount. SO he would have LESS of a salary getting the vouchers.

Our income for example, for last year was jointly 28286...and with 2 kids we got NO WTC. With childcare costs of £259 a week we got from 6th Feb to 5th April ...£1114. with a reduction of £956 due to income. And from he family element we got a reduction of 3087 .

I cant find the paperwork for the current year, but my childcare costs are now around £300 a week pro rata and with that income we get £956 a month.
Next year we get nothing due to us now earning double what we did last year.

Best thing to do would be to play around with the HMRC calculator - that is the one I found is most accurate.

 

[Pearls18]

I get so confused about tax credits and vouchers, I thought you couldn't claim the childcare element of tax credits if getting vouchers,and that you could only claim the child tax credit element (which is likely to be quite low anyway if both parents are working) that's why they have that calculator online that says compares which system you would be best to use (voucher or TC)

So Abz you can claim childcare TC AND vouchers???

 

[lisa9999]

You can't get both tax credits and childcare vouchers.

 

[Wriggley]

So you can't claim child tax credit if you claim the vouchers?

Both my pair are in nursery and we get child tax credit ( no working tax credit)

When I get a job (currently looking) we will be entitled to childcare element of tax credit

So what do the vouchers effect? Just ththe childcare element or that and child tax credit?

I'm so confused lol

 

[Wriggley]

They do this at my OHs work but apparantly it can mess your Tax credits up?

In a way....

In our case we take our total childcare for the year - Approx 17000 and take away the voucher amount - 2916 x 2 peoples(or whatever you receive).

So we have 11465 a year child care costs. This is the amount you can still claim tax credits for

You also reduce your PRE tax and NI salary by 2916(or whatever you receive). THAT salary is what you give to the Tax credit peoples.

im confused lol

does it effect just the childcare element of tax credits or the child tax credit too?

im currently looking for a job myself so we are not entitled to child care element yet and from what ive read if my OH does the childcare vouchers we would pretty much loose our CTC?

until i get a job we rely on that

He cant get them unless you have a child IN childcare...but you can keep getting them if your child leaves child care adn you can bank them - I think its a year they last.

His INCOME for tax credits would go down if he gets the vouchers. You do NOT need to tell them you get vouchers. You just need to give them the salary minus the voucher amount. SO he would have LESS of a salary getting the vouchers.

Our income for example, for last year was jointly 28286...and with 2 kids we got NO WTC. With childcare costs of £259 a week we got from 6th Feb to 5th April ...£1114. with a reduction of £956 due to income. And from he family element we got a reduction of 3087 .

I cant find the paperwork for the current year, but my childcare costs are now around £300 a week pro rata and with that income we get £956 a month.
Next year we get nothing due to us now earning double what we did last year.

Best thing to do would be to play around with the HMRC calculator - that is the one I found is most accurate.

So those amounts are the childcare element or tax credit as a whole?

Every time I Google it it says to stay clear of the vouchers? So I don't know what to do

 

[Pearls18]

Try this Wriggley https://www.gov.uk/childcare-vouchers-better-off-calculator

It told me that vouchers were a no go for us.

 

[Abz1982]

You can't get both tax credits and childcare vouchers.

Yes you can, but they cannot pay for the SAME amount. I.E I cannot claim for my TOTAL childcare bill...but I can for the remainder of the bill minus the amount of vouchers we recieve. .

I have spoken to HMRC about this and it has been confirmed at each renewal.

 

[Abz1982]

So you can't claim child tax credit if you claim the vouchers?

Both my pair are in nursery and we get child tax credit ( no working tax credit)

When I get a job (currently looking) we will be entitled to childcare element of tax credit

So what do the vouchers effect? Just ththe childcare element or that and child tax credit?

I'm so confused lol

The vouchers will lower the childcare bill AND your GROSS income at the same time. So you are in theory earning less. But not a lot. For each £243 voucher we get it costs us about £170, so we only save about £60 a month, but its a needed £60.
For us it brought us under the threshold for 2 kids.

We will be moving over to the new scheme when it comes into force as receiving 20p for every 80p contributed works out more beneficial, only to about £30 a month though.