Childcare - paying when not getting salary

[TheCyclingProgrammer]

You can pay yourself the amount of tax free childcare help you're entitled to out of your limited as a salary provided you're still doing some work to keep it going. You're almost certainly no longer entitled to £243 a month though.

Why wouldn't OP be entitled to the full £243/month as director of their company?

[psychocandy]

Why wouldn't OP be entitled to the full £243/month as director of their company?

All well and good to ask accountant. BUT, as we keep harping on its your company and its always best to understand the rules yourself as well.

[SeanT]

Why wouldn't OP be entitled to the full £243/month as director of their company?

He can pay himself ten grand a month in CCVs if he likes, but the amount that is tax free and not a BIK depends on his highest rate of income tax:

Please note:
If an employees amount is above the tax free limit; the remaining amount should be taken from the employee's net salary.
(The normal maximum tax free limits are:
£243 monthly, £220 4 weekly, £110 2 weekly, and £55 weekly for standard rate tax payers
£124 monthly, £112 4 weekly, £56 2 weekly, and £28 weekly for higher rate tax payers
£110 monthly, £100 4 weekly, £50 2 weekly, and £25 weekly for additional rate tax payers)

My assertion was based on him now being a contractor through a brolly.

[northernladyuk]

All well and good to ask accountant. BUT, as we keep harping on its your company and its always best to understand the rules yourself as well.

And then plough on regardless of the rules.

[psychocandy]

He can pay himself ten grand a month in CCVs if he likes, but the amount that is tax free and not a BIK depends on his highest rate of income tax:

Please note:
If an employees amount is above the tax free limit; the remaining amount should be taken from the employee's net salary.
(The normal maximum tax free limits are:
£243 monthly, £220 4 weekly, £110 2 weekly, and £55 weekly for standard rate tax payers
£124 monthly, £112 4 weekly, £56 2 weekly, and £28 weekly for higher rate tax payers
£110 monthly, £100 4 weekly, £50 2 weekly, and £25 weekly for additional rate tax payers)

My assertion was based on him now being a contractor through a brolly.

Yep know the totals. But do you need to employee and not just director? Or can you still be employee and not getting paid a salary?

[SeanT]

Yep know the totals. But do you need to employee and not just director? Or can you still be employee and not getting paid a salary?

My interpretation is if you pay yourself £124 a month in vouchers, and nothing else, that is your salary.

[Louisa@AardvarkAccounting]

The rules do state that you need to be an employee of the company, in order for childcare costs to be paid through the business.

However it does not specify a minimum salary that needs to be paid.

If you are married and your spouse is not using up all of her personal allowances, you could look at giving them a small salary through the company and therefore still being able to claim for childcare costs.

[SeanT]

So much advice is given around if you're married and your other half doesn't work, whereas I had to do my own calculations to optimise stuff for a partner who already has a "normal job" Someone did post a calculator that took it into account the other day, but it was a couple of years out of date.

[TheCyclingProgrammer]

All well and good to ask accountant. BUT, as we keep harping on its your company and its always best to understand the rules yourself as well.

I do know how the rules around childcare payments work. If OP is still a director of his company, I'm asking why couldn't he receive childcare payments? AFAIK there isn't a minimum salary requirement.

[northernladyuk]

I do know how the rules around childcare payments work. If OP is still a director of his company, I'm asking why couldn't he receive childcare payments? AFAIK there isn't a minimum salary requirement.

I would think the question is not whether he is a director but whether he is an employee, when he is doing no billable work via the Ltd, and it is possible (needs clarifying) that he may have sacked himself so he can sign on for a couple of weeks before taking on the Umbrella contract.