Parents who are high-earners may be able to reduce the potential loss to their child benefit by making the most of salary sacrifice schemes such as childcare vouchers. Featured in a number of national newspapers in recent days, accountants and tax experts have re-enforced how using the childcare voucher scheme could help certain parents manage the effects of planned changes to the child benefit system.
From 7 January 2013 changes to the benefit system will see families where at least one partner earns £50,000 or more having their child benefit reduced, while those earning £60,000 or more will lose the benefit all together.
As the benefit is calculated on taxable rather than gross income, increasing pension contributions and making the most of salary sacrifice schemes such as childcare vouchers may help to reduce the level of taxable pay.
For some working parents, making the most of childcare voucher schemes could impact on the threshold they fall into and thereby increase the amount of child benefit to which they are entitled.
If you are a working parent and would like more information about childcare vouchers, then please visit our website or call the CVS team on 0845 002 1111.
The information and opinions expressed within this blog are for information purposes only. They are not intended to constitute legal, taxation or other professional advice, and should not be relied on or treated as a substitute for specific advice relevant to particular circumstances.