Childcare Vouchers - April 2011

From 6th April 2011, all tax payers will still be able to benefit from using Childcare Vouchers. However, to retain the existing level of benefit, higher rate tax payers need to join a salary sacrifice childcare voucher scheme before this date.

 

Childcare Vouchers - What are the changes?

From 6th April 2011, changes to Salary Sacrifice Childcare Voucher Legislation will take place affecting higher rate tax payers which means they will only be eligible to receive £28 per week in Childcare Vouchers unless they are already in an existing scheme.

There is no change for basic rate tax payers; they will remain eligible to receive the maximum amount of £55 per week.

 

Why Are The Changes Taking Place?

These changes are designed to equalise the tax benefits for higher rate and basic rate tax payers. From 6th April 2011, all employees will receive the same level of income tax exemption of £11 per week.

Do the April 2011 Changes affect me?

If you are a new joiner to a salary sacrifice scheme on or after 6th April 2011. Employees already in an existing salary sacrifice scheme before 6th April 2011 remain unaffected; regardless of their tax band.

For further information please download http://www.hmrc.gov.uk/thelibrary/employee-qa.pdf