Did you Know?

Date Online - 14 June 2006

The rules governing the tax and national insurance treatment of childcare vouchers changed on 6th April 2005 and updated in the 2006 budget. Employers can offer their employees childcare vouchers worth up to £55 per week (£243 per month), free of tax and national insurance contributions.

This means that a basic-rate taxpayer can save up to £962 per year, whilst a higher-rate taxpayer can save up to £1,196 per year.

So, on average, this means a reduction in childcare costs of around £90 per month - or £180 per month if both parents are paid in vouchers.

Operated through a salary sacrifice scheme, the employer will also save national insurance contributions, currently at 12.8% of the value of the vouchers provided.

These changes to the rules have presented employers with a superb opportunity to help their employees meet the costs of childcare, whilst at the same time enjoying significant savings themselves.

www.busybeesvouchers.com/component/option,com_wrapper/Itemid,98/

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