Tax Credits

Before April 2012, parents could usually qualify for tax credits if their total, combined family income did not exceed £41,300 per year. Since 6th April 2012, the income limit is lower for most families and now depends on their individual circumstances, such as how many children they have, whether they pay for registered/ approved childcare or if a parent or child has a disability.  As a rough guide, HMRC have quoted that a family will most likely qualify for tax credits if their total, combined annual income does not exceed £26,000 if they have 1 child and £32,200 for 2 children. As mentioned this is a rough guide. For more information about tax credits, please contact HMRC’s Tax Credit Helpline, tel: 0345 300 3900

(NannyTax)

 

Childcare Vouchers

Childcare Vouchers are a scheme whereby employers can assist employees with childcare costs.  The first £55 worth of vouchers per week is exempt from tax and NIC’s.  The vouchers can be in addition to your salary but are more often a ‘salary sacrifice’.   The vouchers are exempt from NIC’s so you will only pay contributions on your reduced salary, saving up to 11% on NIC.  The vouchers can then be used to pay your nanny or other forms of childcare.

Your nanny will need to be Ofsted Registered and on the Ofsted Childcare Register for them to receive payments via Childcare Vouchers.  They will also need to register with a childcare voucher redemption company which will enable the payments to go directly into the nanny’s bank account.  There is no cost for the nanny and apart from registration there is no more the nanny needs to do.

 

A list of Childcare Voucher companies:

Childcare Vouchers

KiddiVouchers

Fideliti Childcare Vouchers

Computershare Voucher Services