Childcare Vouchers are a great employee benefit for all sizes of company, yet many businesses havent found the time to get a scheme in place. With the Government planning to reduce the level of tax relief on Childcare Vouchers for higher and additional rate tax-payers who sign up after 6 April 2011, now is the perfect time to act!
The planned tax changes means some working parents could lose around 50% of the tax and NI savings that are available to them today and could potentially miss out on up to £1196 in tax and NI relief if they sign up to a voucher scheme after April*. If they sign up before April they will continue to save on their registered childcare costs at the current levels.
Higher or Additional rate tax-payers
If you dont belong to a Childcare Voucher scheme, look into it quickly! If the proposed changes come into effect, most parents would need to have placed a voucher order in their March 2011 payroll to ensure they meet the 6 April 2011 deadline. If they start using vouchers before 6 April 2011, they would save at the current level of around £22 per week of tax relief, equating to a saving of up to £1,196* a year in tax and NI contributions. They would continue to save this amount after the proposed changes come into effect, providing they have registered before 6 April 2011.But if they register after 6 April 2011 they could see their tax and NI savings drop by up to 50%*.