What about childcare vouchers?

What can this mean for me?

So we’re still with our 52 top tips, and we’re onto the topic of reward. Today is all about the nine of spades, which is flexible benefits. 

This is a way of offering each employee benefits which better meet their needs and circumstances. Young singles may prefer more cash, parents may prefer more holiday, and older employees may prefer more pension benefits, pension payments. Flexible benefits need to be carefully planned, so as not to discriminate against anyone, and can be arranged to be taxed efficient. By offering flexible benefits, employers may attract and retain better quality staff. 

Now flexible benefits can include lots of different things. They can be, to do with computers or bicycles. They can be shopping vouchers. They can be medical insurance, dental insurance, pension contributions, extra holiday. But getting that scheme right is really important. And also getting HMRC approval for the scheme is really important. It can’t be seen to be a tax loop. It has to be an approved scheme. So it’s worth really thinking about what would benefit your employees. What’s the most tax efficient way to provide those benefits to your employees? And holiday tends to be one of the most popular ones, at the moment, but it does go in cycles. 

So keep communicating with your staff, look at your demographics, and decide what you need to do, to attract and retain the best quality staff for your business.

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Childcare Vouchers

If I told you that as an employer you could make a financial saving by offering your employees something that many of them would really value, would you want to hear more?

Well, by introducing childcare vouchers and offering them to all your employees through a tax efficient salary sacrifice scheme, you could do just that.

Employees can opt for up to £243 per month in childcare vouchers instead of £243 of their salary – they sacrifice money for vouchers. As a result employees pay no tax or NI on this money and the employer pays no NI.

The vouchers can then be used to pay nurseries, after school clubs, summer schemes and other recognised childcare providers.

Unfortunately, they can not yet be used to pay relatives (such as grandparents) who care for your children while you are at work, but the Government are thinking about it – slowly!

Childcare voucher schemes can be introduced in conjunction with other benefits or in isolation. They must be offered to everyone to be eligible for their tax free status and certain contractual changes are required, but savings can be made even if only one employee takes up the benefit.