Childcare vouchers - again

[Mustang]

I have read a couple of the threads regarding setting up childcare vouchers through Myco. The main decision I have to make is whether to make the vouchers myself and administer it for MyCo or go through a 3rd party (kiddivouchers seems to get the vote).

Who has done this?

Two areas I am concerned about are:

1) Do I do a salary sacrifice or salary addition?

2) My accountant has said if I do a salary sacrifice I need to put in place a employment contract in order to show a genuine sacrifice. I am reluctant to do this since I then handcuff myself to the same salary each month and will lose any flexibility.

Any thoughts advise and/or tales of what folks did?

As I can only save 12.5% of 243GBP per month I am not sure it is worth the extra hassle. Comments?

What other paperwork have people put in place for their schemes to keep themselves legal?

TIA

[al_cam]

Hi,

I've been doing this for a while now. It really isn't much work.
Using a voucher scheme costs your business (and therefore you) money (although this is a valid business expense.)

I did a salary addition, on the advice of my accountants (SJD). It seemed easier to me as well. You need to be sure that with the sacrifice that you don't put your earnings below the minimum wage.

Strictly speaking, HMRC could ask you to provide evidence that you made the scheme available to all employees.
The childcare must be approved - i.e. from a registered nursery or childminder - no paying family members to look after your kids. Again, HMRC may ask you to prove this for all payments.
There are also age limits on children (i.e. no school fees) You could be asked to produce birth certificates to prove childrens ages.

Not sure how you worked out the 12.5% - I guess it depends how much you pay yourself and how many dividends you take, but I think 12.5% seems very low. CT is 19% so assuming you do pay dividends, you save 19% straight away plus whatever tax you would have paid. How did you work that out?

Alan.