Childcare vouchers
Did you know that childcare vouchers worth up to £55 a week are currently free of tax and national insurance for all employees?
The previous government announced plans to restrict tax relief for higher paid employees who join a childcare voucher scheme from 6 April 2011. Such employees will only be entitled to receive up to £28 (for 40% taxpayers), or £22 (for 50% taxpayers), of tax and national insurance-free childcare vouchers per week. Basic rate taxpayers will be entitled to up to £55 of tax-free childcare vouchers per week.
This means that the rate of tax relief will be the same regardless of a person’s marginal tax rate. Employees who join a childcare voucher scheme before 6 April 2011 will not be affected by this change, as long as they remain within the same voucher scheme. It seems unlikely the new government will stop the change.