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Childcare Voucher Scheme

Childcare vouchers are a Government scheme designed to help parents afford high quality childcare. UCL operates a Childcare Voucher scheme with Kiddivouchers Ltd. This is a benefit that lets parents make substantial savings against the cost of their childcare. You can use childcare vouchers for many different kinds of childcare, ranging from nurseries and childminders through to out-of-school activities, breakfast clubs and afterschool care for older children.

The scheme is open to all UCL employees in receipt of a monthly salary. The only stipulations are that you are the legal guardian of the child for which the childcare vouchers are going to be used and that after taking the salary sacrifice your pay does not fall below National Minimum Wage.

From 6th April 2011 there will be changes to childcare voucher schemes that will affect higher rate and additional rate tax payers. Employees who already participate in the scheme on or before 5th April 2011 are not affected by these changes unless they leave the scheme.

The purpose of the change is to even out the amount of tax saving available for all employees regardless of the tax rate that the individual pays. Under current arrangements, employees on higher earnings receive a greater tax saving than those who pay tax at the basic rate. The change evens out the amount of tax saving available for all employees. These changes will mean that anyone who joins an employer supported childcare scheme from 6th April 2011 will receive the same level of income tax exemption.

Employees joining the scheme on or after 6th April 2011, will be able to take a maximum amount of vouchers free from tax and National Insurance Contributions as follows:

£243 per month for Basic Rate Tax payers

£124 per month for Higher Rate Tax payers

£110 per month for Additional Rate Tax payers

If however you join before 6th April 2011 all employees can receive £243.00 of vouchers free from tax and National Insurance Contributions.

The table below illustrates approximate annual savings available where maximum amount of vouchers are taken:

  Joining by 5th April 2011 Joining after 6th April 2011
Basic Rate £886.00 (£243.00 Voucher) £886.00 (243.00 Voucher)
Higher Rate £1224* (£243.00 Voucher) £624 (£124.00 Voucher)
Additional Rate £1516* (£243.00 Voucher) £605 (£110.00 Voucher)

*Savings based on 2011/12 tax and NI rates

An employee in the scheme prior to 6th April can alter the amount of the childcare vouchers they require without affecting the rate of exemption to which he or she is entitled.

To find out more information or to join the scheme you can log on to www.kiddivouchers.com and register your details.

You will also need UCL's scheme reference number which is S910484a

Here you will also find a calculator which will let you know how much you can save per month

If you have any queries please contact Emma Sweeney in Payroll and Pension Services on ext 48247 (020 7679 8247) or email emma.sweeney@ucl.ac.uk, , alternatively please visit www.kiddivouchers.com or call Kiddivouchers on 0800 612 4395