childCare vouchers

[retyfraser]

I need some help in understanding ways of saving tax through Child Care vouchers. I understand we can save £243/pm tax by choosing to pay the Child Care providers through my Ltd company.

The problem I face is , the nursery has refused to invoice the child care in my company`s name and my name.

Now, I am not sure how to deal this situation. Can I buy childcare vouchers, through Kiddivouchers ?

can someone please explain me this procedure ?

[Louisa@InTouch]

Yes, you can purchase childcare vouchers instead and this will give the company the same tax saving as if you were paying the childcare provider directly.

There is likely to be a small admin fee for using a childcare voucher scheme provider but this can be paid through your company as well.

The provider is likely to give you vouchers of £55 per week (the equivalent of £243 per month), which can be used to pay your childcare bill.

Make sure when you purchase the vouchers, this is done directly through the business bank account, rather than your personally pay for them and claim back as an expense.

Hope this helps

[TheCyclingProgrammer]

Annoying that they wouldn't invoice and contract with YourCo - did they say why not? But as Louisa says, so long as they are happy to accept vouchers then yes, you can just use Kiddivouchers or similar at the slight cost of admin fees.

[kevpuk]

TBH, I have found it easier (and cheaper!) to simply pay the invoices from MyCo bank account. Mrs Kevpuk gets vouchers from her PermieCo, and so we tend to pay one or the other, depending on amounts. I did enquire about Kiddivouchers etc., having used such schemes when in PermieLand, but figured I would be paying a % for nothing, really, and my accountant advised just to pay direct.

[psychocandy]

TBH, I have found it easier (and cheaper!) to simply pay the invoices from MyCo bank account. Mrs Kevpuk gets vouchers from her PermieCo, and so we tend to pay one or the other, depending on amounts. I did enquire about Kiddivouchers etc., having used such schemes when in PermieLand, but figured I would be paying a % for nothing, really, and my accountant advised just to pay direct.

Exactly the same with me. some months I pay direct from ltd bank some months from mrs vouchers.

I found the drawback in getting vouchers via ltd was they charge an admin fee. If I remember correctly. it was a bit too.

In my case though, I try to keep enough in mrs voucher account because if Im ever on JSA you can't continue to pay for childcare (because you're not employed). So if Im suddenly without contract then mrs vouchers account will be used.

Yes, I could look after kid myself if Im off but then it sometimes makes it difficult to attend interviews at short notice etc. - and sign on :-)

[TheCyclingProgrammer]

TBH, I have found it easier (and cheaper!) to simply pay the invoices from MyCo bank account. Mrs Kevpuk gets vouchers from her PermieCo, and so we tend to pay one or the other, depending on amounts. I did enquire about Kiddivouchers etc., having used such schemes when in PermieLand, but figured I would be paying a % for nothing, really, and my accountant advised just to pay direct.

This is what I do too but as OP said the nursery has refused to contract with and issue invoices to TheirCo so they can't do this.

If your nursery contract and invoices aren't in YourCo's name then you cannot pay them from YourCo without incurring a BIK.

[psychocandy]

This is what I do too but as OP said the nursery has refused to contract with and issue invoices to TheirCo so they can't do this.

If your nursery contract and invoices aren't in YourCo's name then you cannot pay them from YourCo without incurring a BIK.

This is true. But we use a childminder (proper registered one). Luckily she just said yet whatever when I asked about company payment.

We don't really get an invoice - its more like a scrap of paper with the months total on. Accountant told me to just sort out the initial letter then just let them know how much each month then no problem.

I guess they're thinking yeh we get an invoice of sorts and if it ever becomes an issue then we could get it sorted.

[TheCyclingProgrammer]

This is true. But we use a childminder (proper registered one). Luckily she just said yet whatever when I asked about company payment.

We don't really get an invoice - its more like a scrap of paper with the months total on. Accountant told me to just sort out the initial letter then just let them know how much each month then no problem.

I guess they're thinking yeh we get an invoice of sorts and if it ever becomes an issue then we could get it sorted.

If you have a written agreement/contract in place between the registered childminder and YourCo then that should be good enough - the key thing is establishing that the liability to pay is on YourCo, not you otherwise the payments would be seen as discharging your debt ("pecuniary liability principle": Employment income: benefits in kind treated as earnings under Section 62 ITEPA 2003: benefits of direct monetary value to the employee: employer paying employee's debt: the pecuniary liability principle).

When I signed the contract with my daughter's nursery I put MyCo's name down and signed it as company director which the nursery were happy with. They were also happy to issue an invoice to MyCo each month (in addition to their automated statements which were addressed to my wife and I).

If you're doing it properly, don't forget you should also be undertaking a basic earnings assessment at the beginning of each tax year which outlines your relevant income and how much childcare costs you are entitled to - same applies if you employ your spouse/partner (or if she is company secretary) and you are also paying childcare to her.