Home Lifestyle Q&A: What Are Childcare Vouchers And How Do They Work?

Q&A: What Are Childcare Vouchers And How Do They Work?

by S1m

If you’ve been anywhere near an office notice board or a newspaper within the last couple of years, chances are you will have heard of childcare vouchers. But what is surprising is how many of us don’t actually know what they are or how they work.

This article will guide you through the myths and confusion, all while giving you some tips that could potentially save you more than a thousand pounds every year. Yes, we thought you might be interested in that!


Who gives out these glorious money-saving tokens then? Well, contrary to popular belief, it isn’t something you get straight from the government, but it’s your employers that supply you with the vouchers.

While many smaller businesses haven’t got around to giving employees the option of using a salary-sacrifice programme to avoid paying VAT and national insurance rates on their childcare, this can be arranged if your bosses join up with a childcare voucher provider like You at Work.

If you’re self-employed or freelancing, fear not, simply setting up a limited company and liaising with HM Revenue and Customs will also allow you to access the scheme.


If your company is all signed up and ready to go, then all you have to do is let your human resources department know you want to opt-in and pay for vouchers via salary deductions.

Any business worth their salt will already provide you a breakdown of your benefits and deductions (commonly referred to as a Total Reward Statement) and this will make it clear exactly how much of your pay is being docked in order to get your tax-free benefits.

All you have to do after this is make sure your human resources department gets around to sending you the physical vouchers, although some firms operate a paperless system and this can be emailed directly to your daycare centre or childminder.

However, it must be noted you have to make 100 per cent sure that your chosen childcare provider is registered to the government and has done all the paperwork necessary to receive vouchers as payment.




Why bother? Well sir or madam, we’re all aware of the challenging nature of bringing up a child in 2013 and this is made even more difficult because of high costs at nurseries and other care facilities across the UK.

So taking 20 per cent off the price of all of it (for VAT) could make a monumental difference and, if the cards are stacked in your favour, you could save as much as £1,800 every year because of the scheme.

Not only is this good for you, but it also means your offspring is getting the care and attention that they need to grow and develop properly. It isn’t just youngsters that can take advantage – children up to the age of 15 can benefit if they’re members of registered after-school clubs that charge a fee.

There is an increasing body of scientific evidence showing that the first years of a person’s life are the most important in developing their future chances of employment and, most importantly, happiness and simply pestering your human resources department to start offering vouchers could help you change your little one’s life.


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