One of the most family-friendly benefits an employer can offer staff is childcare vouchers. Employees who take up the offer can enjoy tax and National Insurance Contributions (NIC) savings of up to £1,460 a year. Given the tax efficiency of childcare vouchers it is well worth seeing if you can benefit from offering them too.
Changes from 6 April 2011
The Government announced changes to the arrangements in their June 2010 Budget. The aim of the changes is to even out the amount of tax saving available for all employees regardless of the tax rate that individual employees pay. The changes only affect employees who join schemes on or after 6 April 2011.
The potential savings for employees will change as follows:
As an employer you will save NIC (12.8% increasing to 13.8% from 6 April 2011) on the cost of the vouchers.
For those already in schemes by 6 April 2011 the savings will remain more or less the same as they are now, the only changes are due to the increase in employees’ NIC rates, effective from 6 April 2011.
You should consider setting up a scheme in advance of the changes on 6 April 2011, as both you and your employees are likely to save £1,000s.
If you would like a copy of our factsheet on childcare vouchers speak to your usual Hazlewoods contact Roy Thorogood on 01452 634800 or firstname.lastname@example.org