FAQ section for employees on the childcare voucher scheme

The Childcare Voucher Scheme closed on the 4th October 2018 to new applicants.

No, it closed to new entrants in September 2018. If you have a childcare voucher account with a childcare voucher provider, and you have made a payment into within the last 12 months, and have not used the Tax Free Childcare (TFC) scheme for more than 3 months than you can still use the Childcare Voucher Scheme.

If you have a childcare voucher account with a childcare voucher provider, and you have made a payment into within the last 12 months, and have not used the Tax Free Childcare (TFC) scheme for more than 3 months than you can still use the Childcare Voucher Scheme. But you cannot use both schemes simultaneously.

Unfortunately, the Childcare Voucher Scheme closed to new entrants in 2018 so unless your employer already offers the voucher scheme and you have actively used it in the last 12 months, you cannot join. The Workplace Nursery Scheme is available to those with nursery age children and can save you much more money then the Childcare Voucher Scheme, click here to visit our dedicated Workplace Nursery website to find out more.

If your employer does offer childcare vouchers, we can manage the scheme for them, usually saving them money, and making life easier for you and for your employer. Just contact us to find out more.

This is the amount you are allowed to claim Tax and NI free in childcare vouchers for whatever payroll period it applies to.

If you join the scheme on or after 6/4/2011 the limits are as follows. For weekly paid it is £55 for 20% tax payers, £28 for 40% tax payers and £25 for 45% tax payers

You are allowed to save the allowance or claim it in the payroll month, as long as you do not forward claim

You are also allowed to take vouchers over and above your allowance but your employer would declare the excess on the P11D and/or you would declare it on your self assessment form

Childcare voucher schemes are a method of using a Tax and NI free way to meet all, or some, of your childcare costs

Using childcare vouchers supplied to you by your employer is a simple and easy way to pay for childcare with Tax and NI free funds, it makes childcare more affordable.

It is a non taxable benefit as part of your benefits package

You request the childcare vouchers from your employer who processes the request through payroll, enabling the amount to be Tax and NI free.

Salary sacrifice, salary addition and flex benefits packages are normally the way the vouchers are accounted for.

It is a very flexible system.

Anyone with parental responsibility, like parents and guardians, are able to claim childcare vouchers through their employer so long as they registered with a Childcare Voucher Scheme before September 2018 and have been making eligible payments into a scheme since, and also have not used the Tax Free Childcare (TFC) alternative scheme for more than 3 months subsequently.

You have to be employed and paying Tax and National Insurance. This applies to Company Directors also. In other words to make a saving you need to be paying tax, or would have to pay tax on any enhanced package

In the case of parents for instance, both parents can claim the allowance. It is per parent, not per child.

There must be no minimum wage issues if you take vouchers as part of a salary sacrifice scheme. Also note that at low levels of pay NI contributions can be a limiting factor.

On the maximum voucher allowance a 20% tax payer would save £77.76 per calendar month, or £933 per year.

40% would save £52.08 monthly or £623 yearly

45% would save £51.70 monthly or £620 yearly

HMRC state that you can claim as soon as your child is born. You can then save the vouchers to go towards future childcare costs. However the scheme closed to new entrants in September 2018 so you would have to be an existing scheme user and other exclusions now apply.

You could request vouchers for a particular childcare provider, you request funding for your account if you do not know who your child care provider will be or simply save your allowance to use later on in the same tax year.

Vouchers can be used towards childcare costs up to the age of 15 years, or 16 years if your child has a disability.

HMRC do not allow this to be done. However a family member may have a nursery and if your child goes there and pays the fees as a regular person does then that would be fine

Pretty much any formed of registered and approved childcare can be funded with vouchers.

Childminders, day nurseries, registered nannies, breakfast and after school clubs, holiday clubs etc are just some of these.

Boarding fees can also be paid if invoiced seperatly, please ask us for advice

There isn’t a simple answer to this but it would depend on your household gross income to a large degree as to which way you would choose to go.

You can contact the HMRC helpline on 0845 300 3900 for help or go to the HMRC website and use the childcare indicator.

HMRC do not allow this, you cannot pay for education with the vouchers.

But you can pay for after school activities as long as they are billed seperately from the school fees, including boarding fees

If you have funds in your account you can simply issue vouchers for the precise amount you require, when you require it.

If you do not have funds you can request funds, up to the available allowance you have left, to put into your account.

Or you could simply choose to save your allowance till you need it later in the tax year, and then use that allowance to issue vouchers for the right amount.

Yes, you can use the vouchers to pay a single childcare provider, or multiple providers if you wish.

It is often quite useful to simply request funds for your account and then issue vouchers to them from your account.

The vouchers form part of your gross package and are NOT subject to Tax or NI treatment.

There are 3 main methods of receiving the benefit. The first being as a ‘salary addition’ where the vouchers are simply added to your current salary. This can be as a bonus for instance and often used by company directors.

The second would be as some part of an added value flex benefit package.

The third is the most common and is called a ‘salary sacrifice’ and this is where you sacrifice the amount of the voucher from your gross pay and then only pay Tax and NI on what is left, and receive the voucher amount gross.

You would normally receive vouchers and/or account funding on or before your normal pay day, as they form part of your rewards package.

You would submit your requests at a predetermined date shown in your account.

You receive confirmation that your request had been approved by your employer.

You receive your voucher and/or account funding once cleared payment has been received and normally before the valid from date on your voucher or funding is due.

The allowance builds up in your account from the time your employer joins the scheme, assuming you are currently employed by the employer.

It pretty much means that for every week you are working the allowance will depend on your tax rate.

Your account will show the balance of your remaining allowance on the request voucher page.

So if your employer joins the scheme at any time other than the start of the tax year you need to ask us if your allowance is correct, we made need to make an adjustment.

You simply use the email address and password you used to register on the system.

You can access your details, your child details and voucher details.

You can also request vouchers and funding amounts and issue vouchers from your account balance.

Simply contact us on the support lines for help if you are in any difficulty

You receive them by email to the address you registered with, or you can choose to email them direct to the childcare provider.

You can also print them off from within your account.

Yes, you can mark your account to send automatic payments to your childcare provider by checking the box in your account preferences.

Your childcare provider must also check their account too and your employer must ensure cleared funds are there to meet the request on the valid from date.

Some childcare providers do not subscribe to the automatic payment system so please check your account regularly to ensure payments are being made. We will not accept any late payment charges from your childcare provider.

There are a number of different ways.

You could present them with or email them a voucher and they would then call the freephone number on the voucher to request payment.

They could also logon to their online account and request payment from there.

There is a system that allows automatic childcare provider payments that parents and childcare providers can use.

If both parties choose to use the system the funds are automatically transferred on the voucher ‘valid from’ date as long as cleared payment has been received from the employer.

You could also issue a voucher from your account balance and payment is sent to the childcare provider the following day.

Each payment we make to your childcare provider is referenced with your child’s name and the voucher number, by default.

This makes it quick and simple for your childcare provider to identify whose bill the payment should be allocated to.

If the childcare provider wishes to use a reference number specific to their accounting procedures, relating to you or your child, this information can be added to your account.

There is also another override reference they can use if needed.

We also let you and the childcare provider know by email when we make a payment.

The simple answer is yes you can but you are also subject to any terms and conditions agreed with your employer.

You cannot have any deductions by way of a salary sacrifice from any statutory payments. You cannot salary sacrifice from statutory maternity or paternity pay. And this issue is not simply a childcare voucher issue, it applies to all benefits offered to you.

But you are allowed to have a deduction by way of salary sacrifice from any enhanced payments you receive, over and above the statutory payment. You can also receive childcare vouchers as a salary addition whilst on leave.

The broader issue is regarding the advice given to parents.

The first issue is that some parents would be better advised to come off vouchers some time before they go on leave to minimize the impact of the vouchers on their SMP. They would need to have a pay award in order to re-calculate the correct SMP.

Some parents would not want childcare vouchers whilst on leave anyway, they need living money!!

Remember that you can still bank your allowance for later in the tax year on your return to work but you cannot carry it forward into another tax year.

Benefit legislation, that has been in place for some time, does state that all employees that receive benefits, including vouchers, have the right to continue receiving them if they wish whilst on maternity leave, up to a period of 12 months. This legislation applies to salary addition benefits, and not salary sacrifice benefits. The period was extended from 6 months this year (2008). It is also noted that companies must comply with any discrimination legislation as well.

There appears to be a section of the legislation that allows for employment contracts to override this, so an employee’s contract would state that certain benefits would be excluded voluntarily during leave or absence periods.

As far as we are aware the advice coming from the legal profession, HMRC and other bodies, including childcare voucher scheme operators is varied. Here are some links that relate to recent documentation and cases.

Our interpretation is that it is perfectly legal to have a contractual clause that limits the benefits at times of leave, as long as it is not a compulsory clause. The timing of the contracts would be important.

The Inland Revenue themselves cover this topic in their salary sacrifice sheet, http://www.hmrc.gov.uk/employers/sml-salary-sacrifice.pdf
and it clearly states on page 11

‘subject to the terms of the contract the employee may be able voluntarily to opt out of receiving the non-cash benefit under the salary sacrifice arrangement. However it is important to emphasise that the employer cannot compel the employee to opt out of receiving the benefit.’

If you wish to make a payment from your funding, you can either login to your online account using your email address and password you would have received when you registered with Enjoy Benefits Ltd, click on request voucher funding and chose the pay carer now option, it gives you the option to chose an amount and childcare provider.

If you do not wish to login then you can email Enjoy Benefits Ltd, confirm your name, the company you work for, how much you would like to pay and the childcare provider name and postcode.

Once the payment has been released you will receive a voucher for your reference only and Enjoy Benefits Ltd make the payment auotmatically to the childcare provider.

Yes, both working parents are able to claim childcare vouchers from the moment the child is born.

If you pay more than one childcare provider you can have the money go into an online account for you to login or email Enjoy Benefits Ltd to confirm which childcare provider you wish to pay and for what a amount, Enjoy Benefits Ltd then automatically pay the childcare provider and you receive a remittance by email.

If you have any vouchers or funding in your account then they will stay there until you use them. If your new employer is not set up with a voucher provider and you wish to continue this benefit, ask them to contact Enjoy Benefits Ltd where we will explain how the scheme works and how it makes the employer a saving as well as employees.

HMRC state that you should hand any unused vouchers back to your employer should you leave his service

No, vouchers are valid for 12 months, so you can use them at a later date if you wish to.

If you have vouchers in the system that have not been paid to your childcare provider yet and you wish to change the provider you will need to email Enjoy Benefits Ltd at [email protected] and confirm who you work for, what vouchers you want changing along with the new provider name, postcode and contact number

We will then process the voucher into your funding account and re-issue the funds to the correct cchildcare provider

You will need to let your employer know so they can re assess your remuneration package.

You also send an email to Enjoy Benefits to say you wish to pause your account.

There is no tie-in period with Enjoy Benefits Ltd, if you wish to stop taking them you just need to email to confirm you wish to stop taking them before the next voucher is approved.

You can contact us on 0800 644 3000 or email us at [email protected] where we will deal with your queries, our office hours are Monday – Friday 9am to 5pm.

Outside these hours you may leave a message and we will respond next working day.

Salary sacrifice schemes are not permitted to reduce an employees salary below National Minimum wage.

So it doesn’t matter how many hours you work, as long as you do not drop below minimum wage once the voucher amount has been deducted from your gross salary.

The scheme closes to new members on the 31st of March 2018, so you and your employer needs to be registered with us before then to be able to take full advantage of the scheme.

Dedicated Website

Visit our Workplace Nursery website for more in-depth information and a savings calculator that will let you see exactly how much you can save.

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