Reply to: Childcare Vouchers

[l35kee]

OK, let me be slightly less specific for a change. You need to have a contract in place between YourCo and the provider. The clue is in the name: "directly contracted childcare". I suppose it doesn't need to be signed - a contract can be implicitly agreed and accepted.

IMO the wording of your letter would form a contract between YourCo and the provider so would probably be fine, but if you can get invoices in the company name from the provider, even better.

Gotcha, thanks for clarifying.

[WTFH]

Quick question... do you currently have a child?

[TheCyclingProgrammer]

Are you certain? There is no signed contract in place between anyone. This is the content of the letter.

We agree to purchase childcare from you to the value of £xx per week from
4th September 2014. We intend to give the childcare as a benefit to our
employee, Fred Bloggs for use by his son, Tom.
This agreement may be amended or cancelled if Fred Bloggs leaves the
employment of XYZ Consulting Limited.

OK, let me be slightly less specific for a change. You need to have a contract in place between YourCo and the provider. The clue is in the name: "directly contracted childcare". I suppose it doesn't need to be signed - a contract can be implicitly agreed and accepted.

IMO the wording of your letter would form a contract between YourCo and the provider so would probably be fine, but if you can get invoices in the company name from the provider, even better.

[l35kee]

You really ought to have a signed contract between YourCo and the childcare provider or you're risking a BIK charge (as the liability to settle the childcare bill is with whoever is on the contract and if that's you or your spouse, YourCo paying it would be a BIK due to the pecuniary liability principle).

Are you certain? There is no signed contract in place between anyone. This is the content of the letter.

We agree to purchase childcare from you to the value of £xx per week from
4th September 2014. We intend to give the childcare as a benefit to our
employee, Fred Bloggs for use by his son, Tom.
This agreement may be amended or cancelled if Fred Bloggs leaves the
employment of XYZ Consulting Limited.

[Guvernator]

I've read that childcare vouchers will soon be ending anyway to be replaced by some other scheme. I currently do the pay directly through your Ltd company method. I assume this won't be effected by the change to childcare vouchers ie they aren't going to turn around and say you can't pay from your Ltd company any more, you have to use the new scheme?

[TheCyclingProgrammer]

If you don't need to stockpile vouchers as previously mentioned. Just pay the fees directly from your business bank account. Your accountant should be able to provide you with a template to hand to your childcare provider. It'll essentially say "my payments are being made by my employer for £x per month, and will stop if I leave their employment blah blah".

You don't need to/shouldn't do it the vouchers route.

You really ought to have a signed contract between YourCo and the childcare provider or you're risking a BIK charge (as the liability to settle the childcare bill is with whoever is on the contract and if that's you or your spouse, YourCo paying it would be a BIK due to the pecuniary liability principle).

[psychocandy]

You can run your own scheme if the childcare providers are willing.

Even better is if you can arrange the contract directly between YourCo and the provider. This simplified things.

Yep much easier. This is what I used to do. All you need is a letter to the supplier and then just pay direct from company.

Just beware of the maximums that still apply.

[SeanT]

There is nothing stopping you running a childcare voucher scheme internally (within your company) and stockpiling vouchers.

All you really need to do is ensure you don't provide more than £243 per month and it is spent on an approved childcare provider when the "voucher" is redeemed.

...and that the company and thus the scheme continues to exist...

[EinsteinTax]

But you can't stockpile vouchers for use later if for example you're planning another sprog.

There is nothing stopping you running a childcare voucher scheme internally (within your company) and stockpiling vouchers.

All you really need to do is ensure you don't provide more than £243 per month and it is spent on an approved childcare provider when the "voucher" is redeemed.

[l35kee]

If you don't need to stockpile vouchers as previously mentioned. Just pay the fees directly from your business bank account. Your accountant should be able to provide you with a template to hand to your childcare provider. It'll essentially say "my payments are being made by my employer for £x per month, and will stop if I leave their employment blah blah".

You don't need to/shouldn't do it the vouchers route.

[Lance]

You could ask your accountant. I’m surprised that’s not been suggested.

Mine told me to write a letter to the nursery, from my co, telling them the company would be paying. That was just for records. After that the nursery bills were paid direct from company bank. Once the (I think) £143 had beeen reaches Mrs.L. used her vouchers to pay, and after that we paid personally. Nursery didn’t care.

[tarbera]

Childcare Vouchers

Remember, like family allowance it has a maximum earnings limit check you are below them

[TheCyclingProgrammer]

But you can't stockpile vouchers for use later if for example you're planning another sprog.

Fair point.

[SeanT]

Even better is if you can arrange the contract directly between YourCo and the provider. This simplified things.

But you can't stockpile vouchers for use later if for example you're planning another sprog.

[SeanT]

Cheapest I found and not worth the hassle of running your own scheme for the amount it costs. Dead easy to set up. https://www.applechildcarevouchers.co.uk/