What are Childcare Vouchers?
These are a form of 'employer supported childcare' which provide an easy way for your employer to help support you with your childcare. They will need to have a childcare voucher scheme in place before you can start receiving vouchers.
The way a scheme works is that your employer gives you the option to take part of your salary in childcare vouchers, which is arranged through payroll, and the value of vouchers you choose to take is tax and NI free.
This process is called 'salary sacrifice'. The government has set a limit on the amount of salary you can exchange for childcare vouchers, up to £55 per week, although this varies if you are on a higher rate or additional rate of income tax. Because the vouchers are tax and NI free, you end up with more money in your pay packet than you would have had if you had paid for your childcare with cash from your normal taxable pay.
Contact your employer to see if they offer this service.
Please note that salary sacrifice schemes can affect your entitlement to tax credits and statutory benefits such as Statutory Sick Pay (SSP) and Statutory Maternity Pay (SMP) because of the way these are calculated. It can also affect earnings-related payments (overtime rates and pay-rises), your State Pension and may affect Student Loan repayments.