The People Bulletin

A new survey has shown that 45% of working parents are completely unaware of childcare vouchers and how they could save them money. The survey polled 2,000 working parents, 55% of whom had children aged between four and 11.

The survey was carried out to highlight the issues facing working parents, and exposed a clear need for childcare options before and after school hours with 62% of respondents saying they had to make financial sacrifices in order to afford childcare, while only 40% used childcare vouchers to help pay for child minders, breakfast clubs and after school programmes.

Offering childcare vouchers

The survey showed that 33% of employees were not offered childcare vouchers, however 22% said that if they were offered the scheme they would definitely take it up.

If you give your employees childcare vouchers, the first £55 a week is free from both tax and NICs if the qualifying conditions are met. Any associated childcare voucher administration costs you pay are also exempt. The qualifying conditions are that:

• your employees can only use the childcare vouchers to pay for childcare that has been registered or approved;
• The child :
  • is a child or stepchild of the employee at whose expense, either in full or in part, the child is maintained; or
  • is resident with the employee and for whom the employee has parental responsibility;
  • qualifies up to 1 September after their 15th birthday (or 1st September after their 16th birthday if they are disabled); and
• Your childcare voucher scheme is generally available to all of your employees where the scheme operates.

Tracy Wilson, group operations manager for Co-operative Employee Benefits said: “The headlines focussing on the expense of childcare in the UK has highlighted a problem. There is simply not enough awareness of childcare vouchers and the benefits that they hold for both employer and employee.

“Offering childcare vouchers to your employees shows that you care. The scheme has been proven to enhance recruitment and retention within both the public and private sector. Introducing a voucher scheme shows employees that you are committed to family-friendly working. The vouchers can make a significant difference to an employee’s family budget, especially at a time when finances are under strain.

“The scheme is designed to be financially beneficial to both employer and employee. As vouchers are exempt from National Insurance, the administration costs of running the programme are covered by the NI savings”.

www.employeebenefits.coop

www.hmrc.gov.uk/childcare/childcarefactsheet.htm