Introduction for Newsletter 01.07.09

Written by Ian Congreave - Filed under: Editorials on July 1st, 2009

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Just a few small items of news this week, but the adjusted definition of “qualifying child care” has prompted a reworking of our Employer FAQ on the tax and NICs liabilities of childcare vouchers.

Probably the most popular benefit provided under salary sacrifice schemes at the present time, childcare vouchers enjoy what is called a “limited” tax and NICs exemption – they are not entirely tax free but are only taxable to the extent that their value exceeds £55 per week or £243 per month.

Strictly speaking, however, that simple statement of tax liability is incorrect – it describes a “simplified” approach granted by HMRC in circumstances where the same value of childcare vouchers is provided every pay period and the value never exceeds the £55 or £243 limits.

But, if the value of vouchers provided varies each pay period and/or exceeds the limit, the “statutory” calculation of tax and NICs liabilities must be used and, if you have not come across it before, you are not going to like what you read.

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Written by Ian Congreave -

Filed under: Editorials on July 1st, 2009