Childcare Vouchers and VAT

 

With the increase of VAT childcare will become more expensive - some employees may be unaware that up to £243 of Childcare vouchers can be claimed each month, saving up to £1,195 in tax and National Insurance for each eligible parent via a salary sacrifice scheme implemented through the payroll. These vouchers can be used to pay for any form of registered childcare.
 
Childcare vouchers are deducted from the gross salary by payroll, and then this money is transferable to the childcare provider.