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Childcare Vouchers are a means of paying for childcare – including Nannies. They are one of the ways in which employers can assist employees with childcare costs. From 6 April 2005, the first £50 per week of your earnings, can be supplied via childcare vouchers which are exempt from Tax and National Insurance Contributions. Vouchers can be supplied for more than £50 per week but the excess will be liable for Tax and NIC.
How does the Voucher Scheme work? Your employer will normally run a scheme with the help of a childcare voucher company. The voucher company will either supply you directly with your childcare vouchers or they will provide your employer with them, which will be distributed to the staff accordingly. Employees in receipt of childcare vouchers cans use them to pay their Nanny. The Nanny will then redeem the value of the voucher usually by direct payment into their bank account. How do Childcare Vouchers save me money? Childcare vouchers are most commonly offered as a “salary sacrifice”. This means that you sacrifice a specific amount of your salary and instead receive that amount in childcare vouchers. These vouchers (up to a limit of £50 a week (£217 per month) are exempt from Tax and NIC, so you will only pay tax and NI on the reduced level of your income. The savings are significant. For example, a lower level taxpayer could save more than £800 per year on childcare costs whilst a 40% taxpayer could save more than £1,000 per year. The benefit extends to each employed parent, so a two parent family could save more than £1,600 (lower tax bracket) or £2,000 (higher tax bracket). What sort of childcare can I use these vouchers for? Childcare vouchers can be used to pay for Approved or Registered Childcare, including Nannies. The scheme is being run by Nestor Primecare who can be contacted on 0845 767 8111. Further information can be found on the Sure Start website www.surestart.gov.uk/childcareapproval . What is an “Approved” Nanny? To qualify for “approval” a Nanny must be able to fulfill the following criteria: Have an appropriate childcare qualification (see list on Sure Start website). If your Nanny does not have a qualification, she can attend a short course (more details on the Sure Start website) in order to meet this requirement. Have an up to date Pediatric First Aid Certificate. Have an Enhanced Criminal Records Bureau Disclosure which must be applied for by the Approval Company (not the agency). The cost for a Nanny to become approved is currently £96 per year. Some families are offering to pay all or some of this cost, as they are the ones who will benefit – not the Nanny. It is important to remember that just because a Nanny has been “Approved” under this scheme, no other checks have been made as to her suitability for employment with children. It is essential, therefore, to ensure all the other checks have been undertaken including medical history, past employment and reasons for leaving, verification of references, and exploration of personal/family background. An “Approved Nanny” is not automatically a “safe Nanny”. For further information on the voucher scheme for Nannies, please contact Family Match on 10962 855799 or visit www.familymatch.com
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