Tax free childcare for employees

Under a scheme introduced in April 2006, employers are able to provide employees with employees with tax and national insurance free childcare under the childcare voucher scheme, and could save each parent upto £1,195 per year, as the current Tax and NI free rate is £55 per week

The scheme operates by providing paper vouchers to employees who can then redeem with most carers registered under the scheme, and in some cases you can even receive a membership card which lets you pay online or by phone.  

If your employer is not willing to provide vouchers in addition to your current salary, you would be advised to consider a salary sacrifice to benefit from the scheme. Your local TaxAssist Accountant will be able to provide more information on this arrangement and how the scheme is operated.

Date published 5 Dec 2012

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.