Childcare vouchers

[chrisl]

Based on the fact i am a one man band limited company i was trying to find out the best way to pay for my child care.

Two kids that cost me £800 per month in childcare costs.

Being either a higher rate or basic rate taxpayer, would it still be worth while claiming the whole £800 in vouchers and suffering the tax and NI consequences for me and my company as im going over the £55 per week.

I just thought i would ask here before i tryed to work it out myself.

[moorfield]

Originally Posted by chrisl

Based on the fact i am a one man band limited company i was trying to find out the best way to pay for my child care.

Two kids that cost me £800 per month in childcare costs.

Being either a higher rate or basic rate taxpayer, would it still be worth while claiming the whole £800 in vouchers and suffering the tax and NI consequences for me and my company as im going over the £55 per week.

I just thought i would ask here before i tryed to work it out myself.

Do a search on "moorfield", "childcare vouchers", or "kiddivouchers" and you'll see I've posted on this topic before.

[oracleslave]

Have a look here

http://forums.contractoruk.com/accou...ight=childcare

and here

http://forums.contractoruk.com/accou...ight=childcare

[chrisl]

Cheers guys, i have looked at those already, i did do a search but it only talks about the standard £55 per week. Nothing is mentioned about claiming more and whether you will be worse off by claiming the full £800 a month or if there will be a benefit but only a slight one.

[slackbloke]

Originally Posted by chrisl

Cheers guys, i have looked at those already, i did do a search but it only talks about the standard £55 per week. Nothing is mentioned about claiming more and whether you will be worse off by claiming the full £800 a month or if there will be a benefit but only a slight one.

It is in those threads :

The best way to claim childcare vouchers via your own Limited Company is to pay £55 per week from your company account directly to your provider and the balance personally, the £55 PW can be claimed as an expense against corporation tax saving 21% and potentially another 25% in reduced dividends.

If you paid the whole cost from your childcare provider the balance over £55 would be a benefit in kind incurring tax personally and NI in your company making this option less attractive.

i.e. vouchers up to £55 and paid the rest yourself

[chrisl]

Ok thanks for that.

I was just trying to work out if 'less attractive' meant worse off or just meaning more hassle in respect of administration, P11D benefit etc but still beneficial.

[SteveCo]

If you set up via a Childcare Voucher specialist company such as Accor (I have set up an account with them but not starting contracting yet so have not activated the account) you would pay 8% of your voucher total per month in admin fees but you save on both Company NI contributions and your own NI contributions. What I am not sure about is whether this is more beneficial than the method of paying from YourCo account and taking the cost out of your profits for Corporation Tax calculation.
I did find Accor very helpful and efficient (and no, I do not have any link with them, just used them as a permie so stayed with them for myCo).

S

[blacjac]

Originally Posted by SteveCo

If you set up via a Childcare Voucher specialist company such as Accor (I have set up an account with them but not starting contracting yet so have not activated the account) you would pay 8% of your voucher total per month in admin fees but you save on both Company NI contributions and your own NI contributions. What I am not sure about is whether this is more beneficial than the method of paying from YourCo account and taking the cost out of your profits for Corporation Tax calculation.
I did find Accor very helpful and efficient (and no, I do not have any link with them, just used them as a permie so stayed with them for myCo).

S

www.kiddivouchers.com charge 2.5%, but they are online only I believe.

[Chugnut]

There is hardly any administration required after the initial setup. If you go to the trouble to run your limited, run your own voucher scheme. It's really simple. Everything you need is here - http://www.hmrc.gov.uk/childcare/

Just design a poster / memo advertising the scheme (I did mine in Word in 30 minutes) and state it must be available to all employees of MyCo. I googled what an example childcare voucher looked like and designed my own in Word. Monthly administration consists of printing off a voucher, and signing it, childcarer countersigns it and returns it to me. £243 is paid directly to her account from MyLtdCo. All you have to do to meet the obligations of the scheme is to make a note of their OFSTED registration number and when it expires.

If you are within the weekly £55 or monthly £243 limits it does not have to be reported on the P11d either (only if it's for more than this). The voucher amount makes up part of your remuneration and is used to reduce YourLtdCo Corp Tax bill.

[chrisl]

Correct me if i am wrong but if i wanted to put a full £800 through a month it would still be beneficial.

Saving:
£800 x 21% Corp tax = £168
£800 x 20% on salary sacrifice = £160 + Employers and employees NI amount???
Total = £328+

Cost:
745 x 12.8% Employers NI = £95
745 X 20% BIK = £149
Total = £244

I have a min wage salary so NI would be minimal.