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Childcare Vouchers

Childcare vouchers are a service organised through employers that allows families to pay for childcare out of the PRE-Tax salary. Childcare vouchers help families with children in the age range up to 15 years to save around £1,000+ each year on salary costs for childcare. Childcare vouchers are only available through employers who take part in this government service, many small and large companies take part.

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Childcare vouchers allow parents to pay for childcare from the Pre-Tax and National Insurance income. Generous employers offer childcare vouchers in addition to the agreed annual salary. However, very often a childcare voucher scheme requires to give up a small part of the the salary in return for childcare vouchers.

For instance a family could decide to give up £2000 p.a. of Pre-Tax salary and receive from the employer childcare vouchers in the equivalent before tax amount to pay for childcare.
A parent who pays 30% of tax on remuneration would receive for earnings of £2000 after paying tax of around £600 a net salary of around £1400. Now when using childcare vouchers the parents receive childcare vouchers in the amount of £2000, which saves the family around £600 p.a.

Parents paying the Basic rate of tax and higher rate paying parents who joined before 5 April 2011 can pay for up to £243 of childcare with vouchers each month which is £55 per week.
This is for each parent, two working parents could receive £486 a month of Childcare Vouchers.

From 6 Apr 2011 new participants paying higher or top rate tax had their allowance reduced so that all tax payers have roughly the same maximum tax gain.

Current limits are:

  • Basic (20%) Taxpayer. £55/week vouchers, max annual gain £920.

  • Higher (40%) Taxpayer. £28/week voucher, max annual gain £610.

  • Top (50%) Taxpayer. £22/week voucher, max annual gain £590.

  • The number of children you have doesn't impact the scheme.

Childcare vouchers are not specific to a child and usually have a long expiry date, therefore if a family is already aware about increasing childcare costs in the near future it would be possible to ask for the maximum allowance immediately, e.g. the current part time nanny will work full time in the near future as a family is expecting a baby.

Many childcare voucher operators will usually allow to backdate childcare vouchers up to six months, although the first child must be born already at the time a family would like to get childcare vouchers.

This also helps if a family is now employing a nanny who is currently not registered with OFSTED, but the family knows that this nanny is a perfect match for the family and the children are already very happy and excited about the new nanny, but still it would be fantastic to use childcare vouchers as well to arrange for the salary of the nanny from the first day of employment. In this case it would be advised to check with your childcare voucher provider and your employer as in most cases childcare vouchers can be claimed back for up to six months. Whilst employing the perfect nanny the nanny and the family can pursue the OFSTED registration which is a requirement to be able to use Childcare Vouchers. The registration with OFSTED can take up to 16 weeks, but once the registration is completed you can usually arrange for childcare vouchers form the first day of employment of your perfect nanny.
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Childcare vouchers can be used for childcare up to the first September after your child's 15th birthday or 16th if a child has special needs, the provider must be regulated and nannies must be registered with OFSTED.
In addition to OFSTED registered nannies childcare vouchers are usually accepted at any nursery or playgroup which is registered and regulated by OFSTED.

At LingoNannies our experienced consultants are delighted to assist families and nannies with the OFSTED application and answer related questions. We are will be happy to assist you and your family.

As every case is individual it is advised to always ask the childcare voucher provider for the procedures first to find out whether your family is eligible for tax credits or childcare vouchers as well whether your employer is actually offering childcare vouchers as not all employers offer this service.

In case a family has agreed to a reduced salary to obtain childcare vouchers and has no nanny or nanny housekeeper employed any longer it is important to report this to the employer immediately in order to receive the full salary again as prior using childcare vouchers. It is advised to check for your case individually prior agreeing to a salary sacrifice.

Please note this information on this page is solely a general information for families employing nannies or nanny housekeepers. As every case is individual and legislations may change LingoNannies can not take any liability or being held responsibility for the information provided on this page. Please kindly ask your employer, your childcare voucher provider and you local childcare authority for details and advice on your individual case. In case your would like our experienced consultants to enquire about your case and help with further information in relation with employing one of our nannies please contact us by email or phone we will be delighted to assist you.

At LingoNannies we handselect carefully candidates with valuable skills in childcare available for you and your family. Many of our available candidates are already registered with OFSTED.

We would like to invite you by registering with us to experience the personal attention we give to everyone who engages with us. Please click here to register with us.