Nanny Jobs |  Find a Nanny |  Nanny Tax



HOME HOME | CONTACT US CONTACT US | REQUEST AN INFO PACK | PAYMENT METHODS

Nanny Jobs and Tax, Find a Nanny
Nannywage Ltd Automatic Enrolment Pensions
in association with NEST

Childcare Approval Scheme

As of April 2005 a government scheme was introduced which enabled parents to get some financial support to help pay for their employment costs, when employing an approved nanny.

Employer Supported Childcare Voucher.
Under the childcare approval scheme (April 2006) families may receive financial support by using employer-supported childcare vouchers, which will exempt parents from paying Tax & NIC on the first £55 per week or £243 per month of their childcare costs

The Salary Sacrifice

Is where the employee gives up salary in exchange for the employer paying towards a place or a voucher in order to benefit from the exemptions available for employer sponsored child care. The annual savings are quite substantial £962.28 for a 22% tax payer and £1195 for a tax payer on 40% rates. And both parents can use the vouchers as long as they are both in employment.

The Working Tax Credit

Families are eligible for working tax credit support for childcare in their own home. Parents on the lowest incomes will receive the most with support tapering off towards the higher end of the scale. The financial support covers up to 80% of childcare costs.

Employer-supported childcare vouchers are a popular way for parents to make savings on their tax relief as the scheme is available to all regardless of income.

Companies should take legal and /or financial advice before proceeding with salary sacrifice schemes, and individuals considering taking a salary sacrifice need to be aware of the implications for their own pay and benefits and state benefits and credits.

To be able to use childcare vouchers you need to be employed, as self employed persons are not able to benefit from childcare vouchers.

If you are a director of a company you can also use childcare vouchers, as long as you make them available to all your staff as well.

Your employer needs to set up a childcare voucher scheme, there are many companies offering this service ( web search voucher companies) depending on service level the costs range from approx 5%-7% of voucher face value. The costs of running the scheme are offset by the savings in employer NIC up to 12.8% and the administration of the scheme can be offset against Corporation Tax.

Your employer will need to know details of your relationship with the child, the child’s date of birth, your nanny/child carer’s registration or approval number and the approval expiry date to make sure you qualify for the Tax & National Insurance exemptions

The vouchers can be used for any registered or approved childcare, for children aged between 0-15 up to 1st September following their 15th birthday (16th if disabled)

Nannywage Ltd does not operate Child care voucher schemes, as the company policy is that, by not being involved, we offer impartial advice to clients.

For further information search, “child care vouchers” on your internet search engine

1. The approvals scheme is entirely voluntary.

2. For parents to benefit from the children scheme, the nanny/carer has to be approved and provide evidence of her approvals certificate to a voucher company.

3. Has a relevant qualification or has attended an approved induction course in childcare.

4. Has a certificate in first aid that is suitable for the care of babies and children and is not more than three years old at the time of approval (e.g. dealing with emergencies, resuscitation, shock, choking and anaphylactic shock)

5. Has nothing in their background that makes them unsuitable to care for children.

6. To qualify the nanny/carer has a Criminal Records Bureau enhanced disclosure check.

7. Is aged eighteen or over.

8. To be registered the nanny will have to pay an annual fee.If the nanny does not already have a CRB enhanced disclosure the cost of this will be included in the registration fee. However if nanny has a CRB disclosure in place there is no reduction in fees.

9. The costs of any qualifications required are not included in the fee.

10. Once a nanny registers with a voucher company, and provides the approval evidence she will be issued with a unique service provider number.

11. The nanny/carer must register a bank account with a voucher provider, and payments are made direct to her bank account.

12. If the nanny/carer is not required to be a registered or approved, there is a voluntary registration process to qualify to accept childcare vouchers

13. Registration to a voucher company in most cases is entirely free of charge.

Useful Information

To check if your nanny/carer’s registration or approval is valid go to:

England - www.ofsted.gov.uk

Wales - www.wales.gov.uk/csiw

Scotland www.carecommission.com

For further information on the rules for tax and National Insurance contributions and the effects of giving up salary for childcare.

Go to www.inlandrevenue.gov.uk/childcare

These notes are for guidance only and reflect the position at the time of writing. They do not affect any right of appeal

Can you receive up to £2,000 per child in Tax-Free Childcare?

What is Tax-Free Childcare?

Tax-Free Childcare is a new government scheme that will be available to around two million working households to help with their childcare costs. From April 2017, working parents with children under 12 (under 17 for disabled children).

Working parents will be able to set up an online childcare account to pay their employee directly. For every £8 parents pay in, the government will add £2, up to a maximum contribution of £2,000 per child, per year (£4,000 per year for disabled children).

To qualify parents must be in work and each earning at least £115 a week and not more than £100,000 each per year and nannies must be registered with Ofsted.

10 things parents should know

To find out about all the government’s childcare Search Tax-Free Childcare then underneath the 10 things parents should know - GOV.UK

CLICK ON Childcare-support tax service
To complete the parent application for childcare support (see how it will work)

  1. Parents will be able to open an online account
    Parents will be able to open an online account, which you can pay into to cover the cost of childcare with a registered provider. This will be done through the government website, GOV.UK. Tax-Free Childcare will be introduced on 28 April 2017, and will then be gradually rolled out over 2017, with parents of children under two invited to enter the scheme first. You will be able to apply for all your children at the same time, when your youngest child becomes eligible. All eligible parents will be able to join the scheme by the end of 2017.
  2. Every 80p you or someone else pays in, the government add 20p
    This is equivalent of the tax most people pay - 20% - which gives the scheme its name, ‘tax-free’. The government will top up the account with 20% of childcare costs up to a total of £10,000 - the equivalent of up to £2,000 support per child per year (or £4,000 for disabled children).
  3. The scheme will be available for children under the age of 12
    It will also be available for children with disabilities under the age of 17, as their childcare costs can stay high throughout their teenage years.
  4. 4. To qualify, parents will have to be in work, and each earning at least £120 a week and not more than £100,000 each per year
    The scheme is designed to be flexible for parents if, for example, they want to get back to work after the birth of a child or work part-time.
  5. Any eligible working family can use the Tax-Free Childcare scheme - it does not rely on employers offering it
    Tax-Free Childcare doesn’t rely on employers offering the scheme, unlike the current scheme Employer-Supported Childcare. Any working family can use Tax-Free Childcare, provided they meet the eligibility requirements.
  6. The scheme will be available for parents who are self-employed
    Self-employed parents will be able to get support with childcare costs in Tax-Free Childcare, unlike the current scheme (Employer-Supported Childcare) which is not available to self-employed parents. To support newly self-employed parents, the government is introducing a ‘start-up’ period. During this, self-employed parents won’t have to earn the minimum income level. The scheme will be available to parents on paid sick leave and paid and unpaid statutory maternity, paternity and adoption leave.
  7. If you currently receive Employer-Supported Childcare, you continue to do so
    You do not have to switch to Tax-Free Childcare if you do not wish to. Employer- Supported Childcare will continue to run. The current scheme will remain open to new entrants until April 2018. Parents already registered by this date will be able to continue using it for as long as their employer offers it. However, Tax-Free Childcare will be open to more than twice as many parents as Employer- Supported Childcare. Employers’ workplace nurseries won’t be affected by the introduction of Tax-Free Childcare.
  8. Parents & others can pay money into the childcare account as & when they like
    This gives you the flexibility to pay in more in some months, and less at other times. This means you can build up a balance in your account to use at times when you need more childcare than usual, for example, over the summer holidays. It is also not just the parents who can pay into the account - if grandparents, other family members or employers want to pay in, then they can.
  9. The process will be as simple as possible for parents
    The process will be as easy as possible for you. For example, you will re-confirm your circumstances every 3 months using a simple online process; and there will be a simple log-in service where parents can view accounts for all of their children at once.
  10. You will be able to withdraw money from the account if you want to
    If your circumstances change or you no longer want to pay into the account, then you will be able to withdraw the money you have built up. If you do, the government will withdraw its corresponding contribution.

How will it work

You complete the application for childcare support at CLICK ON Childcare-support tax service. Upon application the government will write to you saying whether you are eligible If eligible the government will set up a Childcare account and send you details in a letter There will be one account per child all your accounts will be viewable in one place Payments go directly into nanny bank account.

The importance of nannies and other childcare providers to the scheme

Nannies and other childcare providers have an important role in Tax-Free Childcare - if they do not sign up, parents will not be able to use Tax-Free Childcare to pay them. They must be registered with Ofsted in order to be able to sign up for Tax-Free Childcare.

The government wrote to all registered childcare providers in September 2016 and October 2016, asking them to sign up to Tax-Free Childcare. Going forward, all nannies registering with Ofsted will receive a letter inviting them to sign up.

  1. As a nanny you need to register if you have not already done so
  2. Once you register you will receive a letter from the government inviting you to sign up on line
  3. If you are Ofsted registered you should have received this letter by now
  4. If you did not receive or have misplaced your letter, telephone Childcare Service helpline on 0300 123 4097 they will check your details and re-send
  5. Parents will have one account per child You will receive a payment from each account for each child
  6. The payments will appear in your bank account with a reference of 4 letters, 5 numbers then TFC
  7. The letters are first initial and first 3 letters surname of Parent making the payment
  8. For example you work for P Brown the payment reference will look like PBRO56789TFC This reference will help you recognize payments from your employers

All contents © copyright 2007 Nannywage Ltd | webdesign artdivision



Nanny Jobs |  Find a Nanny |  Nanny Tax