Company paying for Childcare...

Company paying for Childcare...

Author
Discussion

russy01

Original Poster:

4,693 posts

180 months

Tuesday 23rd August 2016
quotequote all
Good Morning,

Ltd Company has no experience with Childcare and no current policies...treat Ltd company as a complete numpty.


Employees X&Y are married, both work for Ltd company, have a 1yr old child and pay basic tax. Their child is going to start attending a Nursery 2 days per week at a cost of £336 per month.

Ltd Company wants to foot the full bill for employees X&Y over and above their current salary..... what is the best way to do this.

Thanks in advance...

essayer

9,011 posts

193 months

Tuesday 23rd August 2016
quotequote all
IANAA but

Currently, each employee can receive an amount each month tax/NI free - if you pay basic rate tax it's £55/week, higher rate £28/week - either as vouchers to be redeemed against a qualifying provider, or as payments directly to the provider (nursery etc).

It changes next year.
http://www.moneysavingexpert.com/family/childcare-...

trickywoo

11,706 posts

229 months

Tuesday 23rd August 2016
quotequote all
Its pretty complicated but if both are full time on an average wage + I think vouchers will be the main option.

These have to be taken out of existing salary i.e. they can't be salary plus. They essentially allow child care to be paid before income tax and NI so the saving is worth it.

russy01

Original Poster:

4,693 posts

180 months

Tuesday 23rd August 2016
quotequote all
I had hoped that the company could have paid for the childcare up to the value of £55 a week per employee with no affect to their payslip. Then treating anything over and above that as a BIK?

Guvernator

13,109 posts

164 months

Tuesday 23rd August 2016
quotequote all
russy01 said:
I had hoped that the company could have paid for the childcare up to the value of £55 a week per employee with no affect to their payslip. Then treating anything over and above that as a BIK?
^^^^ This is correct. Don't mess around with vouchers, they are a faff. Just arrange with the nursery to pay from your business account and get them to invoice your Ltd company rather then you personally. Then just write up a couple of letters for you and the missus to say the company are providing you with childcare allowance for record keeping. Then you need to make entries in your bookeeping spreadsheet as an expense for you and the missus to keep a record of payments and bobs your uncle.

These two sites give a decent overview although as someone mentioned above the rules are changing in April 2018.

http://www.nixonwilliams.com/childcare-costs

http://www.daccountant.co.uk/Childcare%20vouchers%...

russy01

Original Poster:

4,693 posts

180 months

Tuesday 23rd August 2016
quotequote all
Ok thanks for your input.

Doing our own scheme for a fixed amount for Employees X&Y is all well and good...however I read a lot about the same having to be available for every member of staff. Does this mean the same down to the actual contribution amount or the fact they they get support.

e.g Employee X is a Senior Manager who has been with us for 10years - happy to offer them fully paid childcare for their single child as they are valuable to the business (lets say this works out at £300pm)

Employee A, has been with us for 6weeks and is much lower down the hierachy....surely I dont have to offer them £300pm childcare too?

Guvernator

13,109 posts

164 months

Tuesday 23rd August 2016
quotequote all
russy01 said:
Ok thanks for your input.

Doing our own scheme for a fixed amount for Employees X&Y is all well and good...however I read a lot about the same having to be available for every member of staff. Does this mean the same down to the actual contribution amount or the fact they they get support.

e.g Employee X is a Senior Manager who has been with us for 10years - happy to offer them fully paid childcare for their single child as they are valuable to the business (lets say this works out at £300pm)

Employee A, has been with us for 6weeks and is much lower down the hierachy....surely I dont have to offer them £300pm childcare too?
Not the same amount, you just have to offer the contribution scheme to everybody who is on the payroll.

russy01

Original Poster:

4,693 posts

180 months

Tuesday 23rd August 2016
quotequote all
Guvernator said:
Not the same amount, you just have to offer the contribution scheme to everybody who is on the payroll.
My last comment referred to our original idea of simply:

russy01 said:
I had hoped that the company could have paid for the childcare up to the value of £55 a week per employee with no affect to their payslip. Then treating anything over and above that as a BIK?





schmunk

4,399 posts

124 months

Tuesday 23rd August 2016
quotequote all
russy01 said:
My last comment referred to our original idea of simply:

russy01 said:
I had hoped that the company could have paid for the childcare up to the value of £55 a week per employee with no affect to their payslip. Then treating anything over and above that as a BIK?
Yes you can - https://www.gov.uk/expenses-and-benefits-childcare...