frequently asked questions
head buzzing with questions? read on...
frequently asked questions
using the v-payplan to cover some or all of your childcare costs means a change to the way you are paid by your employer and to the way you pay your childcare provider. To help answer some of your initial queries, we have therefore put together a series of typical questions, which we are often asked.
What is the maximum amount I can claim each month in childcare vouchers?
It all depends on the amount of tax you pay.- £243 for 20% tax payers, £124 per month for 40% tax payers and £97 if you pay tax at 50%. You can request more from your employer, however, any additional amount will be subject to tax and NI.
What if my childcare provider hasn’t yet registered on the v-payplan?
As long as your childcare provider is registered or approved they will be able to register for the plan. We will send them the relevant documentation.
Can I use vouchers for more than one provider?
Yes, but remember to make it clear to us and your employer how you would like to split your entitlement.
I only use childcare during the school holidays, can I still qualify for childcare vouchers?
Yes, simply calculate your annual spend on childcare and divide by 12. This will be the amount you need to claim in vouchers each month.
What can I do if my employer doesn’t offer childcare vouchers?
Most employers should be aware of the benefits of childcare vouchers to employees and themselves. Maybe no one has requested them yet. The best thing to do is to forward this site to them and register your interest with us, we can then talk them through the process.
How much will it cost me?
Nothing. Your employer will pay the fees to operate the scheme. This is more than covered by the savings in employer National Insurance contributions they will make.
When will I receive my vouchers?
Your employer will provide childcare vouchers as part of your weekly or monthly salary.
Why does the maximum amount you can claim in vouchers vary by tax band?
The Government wants to make income tax relief equal for all tax payers.
What is a basic earnings assessment?
At the beginning of each tax year, your employer must make a basic earnings assessment for all employees who joined their childcare voucher scheme after April 5th 2011. The assessment confirms your basic contractual wage/salary, including taxable benefits in kind and any known or guaranteed overtime or bonuses. If your scheme is run on a salary sacrifice basis then it is the post salary sacrifice amount that your earnings are assessed on and ultimately the maximum amount of vouchers you can claim per month.
I have heard I have to enter into a salary sacrifice with my employer to take part in the scheme, what does this mean?
A salary sacrifice happens when an employee gives up the right to receive part of the cash pay due under their contract of employment. This usually takes place when that amount of cash is replaced with a benefit in kind—in this case childcare vouchers. To protect your rights, something as important as this needs to be recorded on your employment file. See our resources page for more information.
What happens if my basic earnings change throughout the year?
The basic earnings assessment your employer makes at the beginning of the tax year sets the maximum amount of exempt income you can receive for the whole of that year. If you move up or down a tax bracket, the maximum amount you can claim in vouchers will only be assessed at the beginning of the following tax year.
Will the way my income is structured cause any issues when obtaining a mortgage or other finance?
No, a lender will take into account your overall remuneration package.
Will claiming childcare vouchers have any impact on my Tax Credits?
Yes it may do, the best answer can be found at the online calculator http://www.hmrc.gov.uk/calcs/ccin.htm on the HMRC website. It calculates whether you would be better off claiming childcare vouchers or just using tax credits.
I am in a company pension scheme and my employer makes contributions, will this be affected?
Joining the v-payplan may have a small effect on your employer’s contributions to your pension, however these will be outweighed by savings made through non payment of tax and national insurance.
What if I change employers?
You will be treated as a new joiner to their scheme and be subject to the annual basic earnings assessment.
If your new employer is not registered with Cheshire Childcare Vouchers, we can send them the relevant documentation.
What if my new employer also runs its scheme through Cheshire Childcare Vouchers?
Unfortunately you will still be treated as a new joiner and subject to the annual basic earnings assessment.
Can both parents claim vouchers for the same child?
Yes, as long as you are both employed and paying tax and national insurance
Do I have to use my vouchers the same month I receive them?
No, they are valid for up to 12 months.
Can I take a break from the scheme?
Yes lifestyle changes are allowed, such as maternity leave, long-term sick leave, career breaks or simply that childcare is no longer required. Providing the overall break period does not exceed twelve months you can remain as an existing member of your childcare voucher scheme. However should you take a break of more than a year, you will be treated as a new joiner when you return. This means you will be subject to an annual earnings assessment as well as being limited to the revised maximum voucher amounts that can be claimed.