Childcare Vouchers Provider

[Lumiere]

For a one man band - just document the voucher agrement between the company and employee (i.e. you)

Are there any templates of such agreement available in the internet ?

[Lumiere]

See here for the ful details.

Phil

Thanks, good overview.

To avoid any P11d reporting and Class 1a National Insurance costs, it would be possible for the Director’s Limited Copany to have a contract with the child care provider for £243 a month

For a two men's company, where both employees (husband and wife) are eligible to receive childcare vouchers how this can be covered in one contract, e.g. £243 + £107 = £350 or £243 + £243 = £486 per month with the same childcare provider ? Do you need to document the split anywhere ?

[BrilloPad]

I have just researched this as baby bp starts nursery in September.

I just paid the nursery. limited pays me. the tax relief is claimed back.

I suppose the voucher thing might be good for large companies but for small ones I dont see the point.

[Lumiere]

I just paid the nursery. limited pays me. the tax relief is claimed back.

I am not sure this is the correct way of doing it:

What forms of support are not covered by the tax and NICs exemptions?

The exemption does not extend to:

* Paying an employee’s childcare bills on their behalf

http://www.hmrc.gov.uk/childcare/childcarefactsheet.htm

[BrilloPad]

I am not sure this is the correct way of doing it:



http://www.hmrc.gov.uk/childcare/childcarefactsheet.htm

Technically the company should pay. But I pay everything out of my own money and my limited reimburses me. I dont see that childcare is any different and neither does my accountant.

Main thing is making sure the nursery is approved : which it is.

[PhilAtBFCA]

I am not sure this is the correct way of doing it:



http://www.hmrc.gov.uk/childcare/childcarefactsheet.htm

Hi Lumiere,

The quote from HMRC says "paying for an employees childcare costs" this is different to the Limited Company contracting with a supplier to provide a service for their employees which is not reportable on a P11d.

So I agree with you, Brillopad I think you are on dangerous ground, and yes there is a difference in HMRC eyes about who is contractually providing the service to whom, the above is the correct way, as far as I can see of doing this.

On a practical level, will an HMRc inspector bother at all if they see this in your books ? Well thats the unknown, why take the risk ? It may be better to do it in a more compliant way and run no risk.

Altertatively use a voucher provider, but it costs fees for that.

As far as two employees are concerned I would suggest one contract for each employee between the Limited Company and the service provider. its cleaner, although I agree its more hassle. Each contract should be a maximum of £243. If the child care costs more than the £243, then a separate contract to the employee needs doing for the amount above £243.

Hope that helps

Phil

[Dearnla]

On the other hand, if you are the sole employee/director of your limited company, and the childcare is for your child(ren) then just write a cheque as and when required. You get the tax relief upto a certain spend per month/per annum and you can be flexible on how much childcare you might need to pay for.
That's how I do it, and the only thing my accountant wanted to check is that it was through a Local Authority registered childminder, which it is. I got a photocopy of her registration certificate to prove it.

I write a cheque every so often, give it to the childminder (and the cheque...) and my missus arranges with her as and when required. I just have to top-up funds now and again.

Simple, no overhead costs, perfectly legal, what more could you want?

[PhilAtBFCA]

On the other hand, if you are the sole employee/director of your limited company, and the childcare is for your child(ren) then just write a cheque as and when required.

Actually no. You need to make sure the agreement is in writing between the supplier and the ltd company and then you can pay from the company.

If you do not do it like this then HMRC may tax you and put NI on the amounts paid by the company, especially if you just write a cheque as and when.

Phil

[Lumiere]

As far as two employees are concerned I would suggest one contract for each employee between the Limited Company and the service provider.

Thanks Phil. Do agree on that.

On the other hand, if you go direct you cannot save up the unused allowance as you can do with the vouchers ?

[Mustang]

Use them here too - go for a salary addition as its simpler to account for and doesn't require evidence to be sent to HMRC like salary sacrifice. Only if you go over the ~£250/month do you have any BIK issues.

How does that help?