Make savings on your childcare costs
Going back to work after having a baby can be a hard decision. Do you go back full time or part time, will your employer let you alter your working hours to do the school run and what will you do for childcare? 

For many working parents, the heaviest burden on their finances is childcare.  Therefore, considering how much the childcare you require is going to cost, can affect your decision about returning to work and the hours you will do.

How can you make your childcare costs more affordable and make returning to work pay? The simplest answer is to use Childcare Vouchers.

What are Childcare Vouchers?

Childcare Vouchers are available from your employer to help you save money on your childcare costs.  To be able to use Childcare Vouchers, parents must be employed, paying PAYE, earning above National Minimum Wage and have responsibility for at least one child.

How do they work?

Childcare Vouchers are deducted from your salary before PAYE and National Insurance is calculated.  Basic rate tax payers are entitled to exchange up to £243* per month from their wages in return for the same amount of vouchers, providing savings of up to £933* per year.

Childcare Vouchers are available per parent, which means that both parents can join their employer’s Childcare Voucher scheme, potentially doubling the savings available.

Where can they be used?

Childcare Vouchers can be used to pay for any registered childcare for children up to the age of 16**including:

  • Nurseries
  • Child minders
  • Play schools and pre-schools
  • Nannies and au pairs
  • Créches and play schemes
  • Before and after school clubs
  • Holiday clubs and activity camps

How can you get Childcare Vouchers?

To start using Childcare Vouchers, you will need to join your employers Childcare Voucher scheme.  Once registered to your employer’s scheme, you can have a deduction from your wages the next time you get paid.

How do you pay your childcare provider?
All Childcare Voucher providers are different, however most place your vouchers into an online account, which enables you to log in, select your childcare provider and make payments straight away*.  Paper vouchers can also be printed to hand to your childcare provider.

If your childcare is more than £243 per month, simply pay the outstanding amount using another payment method.

Childcare Vouchers vs Tax Credits
If you are a parent claiming the childcare element of Working Tax Credits (Universal Credit), you might be better off continuing to do so.  Before signing up to a Childcare Voucher scheme you can use this Government calculator to see which is best for you.

What will happen to Childcare Vouchers when the new Tax-free Childcare scheme is introduced?

The government is implementing a new Tax-free Childcare scheme in 2015, which will be open to all working parents, including those who are self-employed.  This new scheme will cover up to 20% of a child’s childcare costs, up to a limit of £6,000 per year – saving up to £1,200 per child. The scheme will be available for children under the age of five.

When the Tax-free Childcare scheme is introduced, Childcare Vouchers will only be available to those already on a scheme and will remain in existence for at least a further five years.

Therefore, there will be winners and losers with the new scheme as some parents will be able to save more using Childcare Vouchers.  Those who will be better off using Childcare Vouchers should join their employer’s scheme now to maximise the savings available.
For more information about the new scheme visit: www.taxfreechildcarescheme.com.

For more information about Childcare Vouchers please visit: www.busybeesbenefits.com.

*Subject to individual circumstances.
**A child qualifies for Childcare Vouchers up to the end of the week containing the 1st September following each child’s 15th birthday (16th for children with a disability).

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