Changes to ChildCare Voucher Scheme Autumn 2015
One of the benefits of working through an Umbrella company is that by becoming an employee of the umbrella company you can benefit from the tax free incentive of being reimbursed partly through childcare vouchers instead of taxable wages.
Parents who are using an existing childcare voucher scheme or sign-up to one prior to Autumn 2015 will still be able to benefit from their existing scheme for as long as their employer or umbrella continue to offer it. Some employers may choose to switch across to the new scheme.
A benefit that the current scheme has over the new scheme is that no employee (up to 12%) or employers national insurance (13.8%) is payable on the childcare voucher amounts. For an umbrella company worker this can be a considerable saving so at Umbrella we will continue to operate existing childcare voucher arrangements for as long as our providers maintain their service.
Other losers will be high earning families where one parent earns in excess of £150,000 per annum. Currently they can benefit from the existing schemes but will not be able to participate in the new scheme.
A big benefit of the new scheme to be offered through NS & I (National Savings and Investments) is that the amount you can benefit from is increasing to £10,000 which would provide a tax saving on PAYE of £2,000 at the current basic rate of tax of 20%. This limit is available for each child for their childcare costs.
The new scheme will at its launch cover all children under 5 but over the first 12 months will be extended to include all children under 12 years of age.
If you are currently contracting and would like to benefit from being paid through ChildCare Vouchers please call us on 0800 121 6513.