Tax dodge of the week: childcare relief could save you a packet
Mar 07, 2008
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You can claim tax relief on up to £55 a week, using Government vouchers to pay for your childcare, says Nina Montagu-Smith in The Sunday Telegraph. So why aren’t more people using them?
According to provider Childcare Choice, only one in 50 working parents have signed up to the scheme, presumably due to lack of awareness, or fear that the system is too complex.
It’s not. The vouchers cover all forms of registered or Ofsted-approved childcare from nurseries and childminders to nannies and holiday clubs and can be used whenever you want (such as during school holidays). Your employer and childcare provider must register with the scheme, which operates via PAYE, and once both parties are registered, the employee must complete a ‘salary sacrifice’ form. This gives your employer permission to convert part of your gross income into vouchers. These can be sent to you in the post or by email, or you can set up an internet account and get the money electronically.
Staff can also pay the provider direct. If you think it sounds like too much effort, get the voucher providers to do the work for you. Most will take up the cudgels with your employer on your behalf (and remind them that they stand to save £373 per employee). For more, see HMRC leaflet IR115 on their website. Voucher providers include Childcare Choice, Allsave, Accor and Busy Bees.
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