This article is brought to you by Accor Childcare Vouchers.
Childcare Vouchers are the most popular form of employer supported childcare in the UK, and with a tax and NI exemption of up to £55 per week, parents can save up to £1,195 per year on the cost of their childcare.
But exactly how much will parents save and what effect will Childcare Vouchers have on Working Tax Credits and Child Tax Credits?
We all know that childcare issues are particularly stressful for working parents and the financial complexities of employer-supported childcare can add to that stress.
Although the number of organisations offering Childcare Vouchers has more than doubled since new tax breaks were introduced last April, many parents are still unaware of the personal benefit to them. This requires an effective employee engagement and communication programme.
That is why Accor Services is continually investing in communication tools to support employee engagement and ensure a scheme is easily understood by working parents, consequently maximising take-up and reducing the employer’s time involvement.
The Accor Services tax credit Estimator has become an invaluable tool for informing and engaging working parents in order to enable them to calculate the potential savings†that will result from opting into an employer†operated salary sacrifice Childcare Voucher scheme.
Clients have access to this unique, user-friendly online calculator, which allows working parents to navigate the complex tax and National Insurance system and the potentially confusing elements of Working Tax Credit, Child Tax Credit and tax breaks on Childcare Vouchers.
The Estimator calculates which option is the most financially beneficial for each individual, based on elements of their working status including salary and hours worked and current childcare circumstances.
Parents can access the calculator on any internet connection at any time, enabling them to investigate and consider the potential savings from home with their partner and/or other family members. Some parents may not be aware that when sacrificing an element of their salary to pay for childcare, there may be a negative impact on their current entitlements to tax credits. It may also affect their work-related benefits in the future, for example, maternity pay, sick pay and occupational or state pensions.
The calculator can also be used by organisations’ HR functions, saving time by reducing the requirement for complicated calculations and helping to position the organisation as a family-friendly employer of choice.
The views and opinions in this article are those of our sponsor, Accor Childcare Vouchers, and do not necessarily reflect those of www.employeebenefits.co.uk.