What are Childcare Vouchers?
Childcare Vouchers are paid by employers out of your wages, as part of a government scheme.
Childcare Vouchers allow you to pay for childcare directly out of your wages before tax is paid. This means that you can save money on your childcare costs, by reducing your overall tax bill. Not every employer provides Childcare Vouchers, and there are different arrangements available.
If your employer offers Childcare Vouchers, you are eligible if you have children aged 15 years or younger. The childcare provider must be registered with the appropriate authority (most nurseries and private nannies are registered, you should ask if you are not sure), and should not be related to you. The value of Childcare Vouchers you can claim depends on how much you earn and when you joined the scheme. For example, a basic rate taxpayer joining after 2011 can claim up to £55.00 per week. If you and your partner both work, you can both claim Childcare Vouchers.
Although Childcare Vouchers reduce the amount of money you have to pay for childcare, they may also affect your pension payments and eligibility for Child Tax Credits because they reduce your overall salary.