Parents urged to join nursery voucher scheme by 6th April
This is due to planned cutbacks and changes to be announced by the Government in the June Budget, which will mean employees taxed at the higher and additional rate, who join the scheme after 6th April, will have their weekly allowable reliefs reduced from £55 to £28 and £22 respectively.
What happens currently?
Higher rate tax payers can make annual tax savings of £1172 on childcare, such as nursery fees. But those who apply after April 6th may see their saving reduced to £597.
Mark Collins, Head of the Employers Consulting Group at Tilly Baker, urges employers and employees to act now:
“Any employees who can join an existing scheme before 6th April will still be sure of obtaining tax relief at their top income tax rate – couples potentially avoiding a reduction of over £1000 a year in tax savings.”
“Employers who are considering setting up a new scheme or changing the terms of an existing scheme would be well advised to do so in time to enable all eligible employees to join in time. It will not be enough for the scheme to be in place: the employees must also have joined before 6th April.”
Childcare vouchers
Some employers offer childcare vouchers as a benefit to employees. This enables you to make savings on childcare for children up to 15 years of age (16 if they are disabled), provided they are in an approved childcare “setting”. Ask your employer for more details or visit the Childcare Vouchers website: www.childcarevouchers.co.uk
Other financial help you may be entitled to:
Working Tax Credit and Child Tax Credit
You may be eligible for Working Tax Credit if you and your partner are aged 16 or over, are working 16 or more hours per week, and your income is below the required threshold. The amount of money you could get will depend on your individual situation.
If you work and pay for childcare you may also be able to get extra tax credits to help with the costs.
Early Years Education
All three and four year olds in England are entitled to a minimum 12.5 hours of free learning per week for 38 weeks of the year. This can take place in nurseries, playgroups, preschools or at their childminders. This will rise to 15 hours a week from 2010, delivered flexibly over a minimum of three days.
Means-tested benefits
Means-tested benefits are calculated on the basis of your income. If your income is over a certain amount, you will not be eligible.
For more information visit http://www.direct.gov.uk
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