29 March 2011 #Employment
More and more, both parents are being forced to work because they need the money in the current economic conditions. So where does this leave the children and childcare arrangements?
Well some employees are lucky in that their employer operates a childcare voucher scheme. This is a scheme whereby childcare vouchers are provided by the employer for qualifying childcare, often in sacrifice for salary, upon which employers and employees alike enjoy significant tax and NI savings. Currently a maximum £243 can be deducted tax free from pay.
The bad news is that new joiners to the scheme on or after 6 April 2011 who are higher rate or additional tax payers will have less tax relief. The good news is that higher and additional rate taxpayers who already particulate in such schemes as at 5 April 2011 will be able to continue doing so. So the onus is to act fast if employers and employees want to take advantage of this benefit. A higher rate tax payer who could now save £1,225 a year will only save £623 in the future if they don`t join a scheme before the deadline according to Edenred, a voucher provider.
The other good news for such schemes is the launch tomorrow of The Childcare Voucher Providers Association (CVPA). This is an industry body to represent Employer Supported Childcare providers and to promote best practice within the sector. The CVPA sets out the minimum standards that parents, employers and nurseries can expect from voucher companies delivering funds and to protect the integrity of their personal data.
The other option, which is fast becoming a reality, is to turn to the ‘bank` of grandma and grandpa! It has been reported by the insurer Aviva that a survey of grandparents showed that on average they carried for two grandchildren for 13 hours a week and were not paid - an equivalent saving of £2,400 per child.