One of the first things to be called in to question has been Childcare Vouchers, and I’ve seen a couple of articles suggesting that HMRC will investigate whether this rule should be applied to them or not.

I wanted to reassure all our customers and parents that HMRC do not intend to apply this rule to Childcare Vouchers, and we have had the following confirmation from them, “businesses supplying Childcare Vouchers to its employees in similar circumstances to the provision of retail vouchers…will not have to account for VAT on the value of the Childcare Vouchers. This is because the supply of childcare is exempt from VAT.”

They have also confirmed that they are, “…considering whether this will have an effect on the amount of VAT that the business can recover in respect of fees charged by Childcare Voucher Providers. Pending HMRC’s review of the case, businesses that provide their staff with Childcare Vouchers may continue to recover this VAT.”

We are in regular contact with HMRC and as soon as we receive an update on this, we’ll make sure you’re the first to know.

For more information there’s an FAQ section in the HMRC Employer Helpbook (page 10). And if you’ve got any questions, why not leave me a comment, or get in touch on Twitter (@CCVouchers).

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I was too until I happened to be chatting to another Dad in the playground recently. He mentioned that his son was going to specially arranged summer sports sessions at our local leisure centre. The sessions are held throughout the summer and are being run by a company called Little Superstars. I saw this as the perfect opportunity for my youngest son to finally have some tennis lessons, something I’ve been keen for him to do for a while.

It turned out that a few of his friends were intending to do the sessions, so we signed them all up for the same 2 weeks this summer. I’m hoping he’ll have the makings of a Wimbledon champion once the summer’s over.

So if you’re stuck for childcare, why not contact your local sports centre and see what’s on offer.

And remember, if you’re not using your vouchers for summer camps and clubs, you can bank them and use them in the new school year – it’s a great way to get a head start.

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The report looks at the cost of raising a child, maternity and paternity leave and work/life balance – that phrase again sorry! Of most interest to me was the cost of raising a child until they’re 21 which they’ve valued at £800 a month and since last year, the cost of nursery places in the UK has increased by 5.1%. It’s little wonder that people find themselves torn between returning to work and staying at home.

As you know, when you’re a parent every penny counts and there are plenty of ways to save on childcare and out of school activity costs; childcare vouchers are a good example. But if you’re unsure of your options, speak to childcare professionals or ask your employer what’s available to you. You might find that you’re able to make a significant saving on your monthly childcare costs.

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Dame Clare Tickell, chief executive of the charity Action for Children, will review the guidelines with the aim of establishing whether the framework is based on the latest research and whether it’s in the best interests of our young children.

You can read the full article on the BBC’s website.

What do you think to the EYFS and the planned review? Let me know your thoughts here, or on Twitter @CCVouchers.

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Whilst some benefits have changed, or been frozen – including a freeze on child tax benefits for the next three years – families can still take full advantage of those benefits that remain available to them.

Thousands of families who could benefit from childcare vouchers are not using them – and thousands more do not realise that they could be using them right up until their children are aged 16.

I would actively encourage parents to speak to their employers to determine how they could benefit from a scheme that does so much to help so many – but could help many more.

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It got me thinking about how much time your average working Mum or Dad spends organising childcare and managing the work/life balance (sorry to use the dreaded term).

It’d be great to hear some of your experiences and I’ve created a very short survey which you can access here, or by clicking the button on the right hand side. It’ll take you no longer than 1 minute to complete (I am sure you’re all busy people) and all responses are anonymous.

Thank you!

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As I said a couple of weeks ago, we’re in a good position under the coalition government at the moment and I’ve been trying to dispel a pretty big myth lately; that smaller business can’t benefit from offering Childcare Vouchers in the same way that larger companies can.

Research shows that 80% of employers not currently offering childcare vouchers have fewer than 100 employees. Often smaller businesses believe there isn’t as much benefit for them, they don’t have enough parents to qualify and they’ll be under resourced to cope with a further administrative burden.

This really isn’t the case. There’s minimal admin as the voucher provider does that and CVS don’t require a minimum number of parents, so even if only one employee qualifies you can start a scheme today. Most importantly, all companies, regardless of size, make savings on National Insurance for their employees who use the scheme. This means that the scheme is effectively cost neutral to run, and is the same across the board for companies large and small.

During tough economic times, the kind of which we’ve all struggled through for over a year now, Childcare Vouchers are a way to make it easier for your employees and to help take the strain away.

So if you’re a parent thinking about asking your employer to start a scheme, or an employer who isn’t sure whether to take the plunge or not, my advice is go for it – it’s one of the best ways to save money.

You might also be interested in the below articles which I’ve written on this topic:

Making the most out of employer perks – Fresh Business Thinking

Childcare Vouchers – Smallbusiness.co.uk

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As I mentioned in my last post, we’re in a strong position under the coalition Government, but there are changes in store next year.

From 6^th April 2011, childcare voucher scheme rules will change for new entrants who, regardless of their salary, will receive the same income tax relief as basic rate taxpayers do currently.

In order to calculate an individual’s savings, employers will have to estimate, from the beginning of the year, the earnings of any employee joining a scheme. The amount of savings will be based on the level of these estimated earnings:

›       If the level is below the basic rate tax limit for the year, the employee will be entitled to £55 exempt income per qualifying week

›       If the level is above the basic rate tax limit but below the new additional tax limit (50%) the employee will be entitled to £28 exempt income per qualifying week

›       If the level is above the additional tax limit (50%) the employee will be entitled to £22 exempt income per qualifying week.  

These changes will make saving uniform across all tax bands, ensuring equal benefit for all. It means that every parent, regardless of how much they earn, will be entitled to approximately the same level of tax exemption at £11 per week.

Anyone already in or offering a childcare voucher scheme on 6^th April 2011 will not see a difference in the way their savings are calculated, which is why I encourage you to sign up today.

For more about the tax break changes, read the HMRC’s guidance notes on our News / Publications tab. For more about childcare vouchers in general and how to join or start a scheme, visit our website.

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The agreement states that, overall, the most pressing task for the Government is debt reduction and this morning, George Osborne revealed that spending cuts of £6.2 billion will be made.

Amongst the cuts is the removal of Child Trust Funds in January 2011. The coalition agreement hinted towards a reduction in spending in this area, but in fact CTFs will cease to exist in the new year, saving around £320 million per annum.

The coalition agreement also said that spending would be cut on tax credits for higher earners, although they will look to improve the administration of tax credits to reduce fraud and overpayments. However, no announcement was made about that this morning.

The agreement also confirms a focus on making society more family friendly. Initially a Conservative party idea, the Government will encourage shared parenting, including the promotion of a system of flexible parental leave. The agreement also pledges support for a diverse range of providers who will implement the provision of free nursery care for pre-school children. 

There is no mention of how or if Childcare Vouchers will be affected, and I personally believe we’re currently in a strong position under the coalition government. Certainly Childcare Vouchers are still the most viable way for everyone to save on childcare, particularly with the removal of Child Trust Funds and a reduction in spending on tax credits.

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We’ve launched this blog to update you on the latest news from CVS, developments within the industry and bring your attention to any important information or research relating to Childcare Vouchers.

We’re really keen to hear your views and opinions too so please leave us your comments.

We know how important Childcare Vouchers are, for many of you they are the difference between being able to return to work or not, and we’re so pleased that we helped to save them last year; I’d like to personally thank you all for your support during the campaign.

It’ll be interesting to see what our new coalition government will mean for Childcare Vouchers. Both the Conservatives and Liberal Democrats support Childcare Vouchers and were against previous plans by Labour to reform tax exemption. It’s possible that there’ll be a review of how the childcare industry is regulated and funded as the Conservatives were keen to see this happen, but we don’t know if this will include Childcare Vouchers as yet. We’ll keep you posted.

For more information about CVS, please visit our website www.computersharevoucherservices.com

I look forward to hearing from you through this blog in the future.

Simon Moore, Managing Director, Computershare Voucher Services.

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