1. Childcare vouchers and tax credits – lowering costs for working parents

If you pay for childcare such as a nanny, childminder, au pair or special needs nanny, you can get help with the costs with childcare vouchers through your employer and childcare tax credits.

Childcare vouchers are part of a special government scheme that lets you pay your childcare costs from your salary before it is taxed. This is known as ‘salary sacrifice’ and can save up to £1,000 a year as the money that would be spent on tax can go towards childcare. As long as the childcare provider is registered and regulated you will be able to apply for vouchers.

How do I get childcare vouchers?

You must ask your employer if they run a childcare voucher scheme – most large organisations do as they gain advantages through staff morale, less time off for childcare and they can actually make profit as they don’t pay national insurance on the vouchers.

Once you have found out that your employer runs a childcare voucher scheme, you should agree how many you will buy each month. If they don’t run a scheme, you can ask them to consider introducing one.

How many childcare vouchers can I buy?

People who pay the basic rate of tax can pay for £243 (£55 per week) of childcare vouchers every month, per parent. People who pay the higher rate of tax (40%) can buy a maximum of £28 of vouchers per week while top taxpayers (50%) are limited to £22 of childcare vouchers per week.

These limits aren’t per child so they are the same no matter how many children you have. You can also backdate vouchers up to six months.

2. What are childcare tax credits?

Childcare tax credits (officially known as Childcare Element of Working Tax Credit) help you with the costs of childcare by paying money directly into your bank. They are available for people with jobs, to enable you to keep working while you look after your child.

How do I apply for childcare tax credits?

You can call the tax credit helpline on 0345 300 3900 which is open every day, including weekends, from 8am to 8pm.

To qualify you must be:

  • A single parent working at least 16 hours a week.
  • In a couple working at least 16 hours a week.
  • Earn under £42,000 in your household (although you can still apply if you earn more than this depending on your circumstances).

How much can I get in childcare tax credits?

The money you receive will depend on your income and your circumstances such as number of children, any disabilities you or your children may have and you’re working hours. The average amount people receive in childcare tax credits is £61 per week, which equals over £3,000 per year.

Can I get both childcare tax credits and childcare vouchers?

Both tax credits and childcare vouchers can be claimed – however claiming childcare vouchers can mean that your childcare tax credits are affected.

This is because the amount you spend using childcare vouchers doesn’t count towards your childcare costs when tax credits are taken into account. However, your income will also be lower because the childcare vouchers come directly from your pay – this can increase your eligibility for childcare tax credits.

Depending on your level of income and working hours, you should use this information to decide whether childcare vouchers, childcare tax credits, or a combination of the two would best meet your needs.

For more information follow this link from HMRC -

3. How can my Carer become Ofsted Registred?

Follow this link for download more information from the Ofsted organization.

4. Employers Responsibilities

As an employer of your Carer you have some of legal obligations.

When you employ in the UK you become an employer and you will have to comply with the same laws and regulations that commercial employers do.

  • Register with Her Majesty’s Revenue and Customs (HMRC)
  • Pay your employee through Pay As You Earn (PAYE)
  • Pay Income Tax and National Insurance Contributions (NI) when you employ someone in your home.
  • Complete an annual return every year that records your employees and deductions for the year.

You can find more information in the following link download form HMRC.

5. Parenting support web sites

Care Agency