Are you ready for the change?
Childcare voucher schemes have been offered as a benefit by many employers because they are both popular with staff and offer providers tax saving opportunities.
The government announced a dramatic change, in this year’s Budget, in the way childcare vouchers are provided starting in August 2015. Administration of schemes will now be carried out by the state-owned NS&I (National Savings and Investments) who will sell vouchers directly to parents online. For every 80p they spend the government will add 20p , up to a total spend of £10,000.
Importantly the new approach is open to all qualifying parents and not just those whose employers offer a scheme. As a result many working parents will benefit from the changes.
However there are some pitfalls for both employees and employers, which might mean that it is a good idea to retain existing schemes or even start a voucher scheme before the new rules come into place. For example, where there are two parents in the household they must both be working in order to qualify, and some parents will be worse off if their childcare costs are below “standard” thresholds because they don’t, for instance, need daily care.
On the employer side the reduction in NI savings could diminish the amount available to spend on other staff benefits and impact P&L.
It makes sense to consider the implications from both a business and an HR perspective. If you need help sorting out what it means to your tax and NI position then, of course, Lewis Smith & Co. are here to help. We can also recommend other professionals if you need advice on personnel and contractual matters.
All you need to do is call 01384 235549 or email info@lewissmith.com. You can arrange a no-obligation, confidential discussion at a time and place to suit you.
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