Changes occurred to the tax and NI exemptions on #Childcare Vouchers from 6 April 2011. These changes apply to new joiners to a scheme and do not affect those that are already enrolled in a Childcare Voucher scheme.
A restriction has been placed on higher and additional rate taxpayers who join a childcare voucher scheme after 6th April 2011.
• Higher rate tax payers who join a scheme on or after 6th April 2011 will only be able to receive £124 a month tax and NI exempt
• Those paying the additional rate of tax will have the tax and NI exempt amount restricted to £97 a month.
The changes only apply to parents who apply to join a scheme on or after 6th April 2011.
Anyone currently enrolled in a scheme will normally remain unaffected as long as they remain within the scheme. An employee may change the amount you receive after this date and you will still be entitled to £243 tax and NI exempt. If you temporarily stop receiving childcare vouchers for a period of up to 12 months you will normally be considered as continuously in the scheme and not be subject to the new restrictions. If you have left a scheme for longer than 12 months, or change employer then the amount you can receive tax and NI exempt may be affected.
If you wish to discuss this or any other salary sacrifice scheme further please contact us on 020 7330 0000