Childcare
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Childcare Voucher Scheme
Clarification from HMRC on the use of Childcare Vouchers for boarding school fees has been requested and received by the MOD.
It has been confirmed that private tuition fees come within the definition of qualifying childcare, provided that all the other qualifying conditions for employer provided childcare are met.
Boarding school fees qualify to the extent that these relate to care and to supervised activities, including private tuition, which are provided outside the compulsory education. It is therefore important that the costs for these are identified separately from the costs charged for the compulsory education.
If there is no separate identification of these elements, then the total cost would be regarded as being for the compulsory education, and vouchers provided for such costs would be chargeable to tax and NIC.
Therefore, childcare vouchers CAN be used for the boarding element of school fees, and this must be made clear on school bills and invoices.
Changes have also been made to the scheme that make it possible to join and leave at any time, and which enable parents to start claiming vouchers before they have their childcare in place. For further information on the scheme visit www.modchildcare.co.uk.
Childcare voucher scheme tax thresholds for claiming tax free entitlement for childcare changed on the 6th April this year.
- those on the Basic rate of tax will have seen no change
- those on Additional or Higher tax rate banding are now entitled to a lesser amount.
The process for evaluating entitlement also changed as it now includes taxable allowances and bonuses. This process became subject to financial scrutiny by the MOD and has taken around five months. The scheme, administered by Sodexo, should now be available for applicants and all of those who applied on or post 6th April should also have had their applications processed.
We recognise that the childcare voucher scheme is very important to a large number of families and if you are encountering problems with securing childcare vouchers then please let us know so that we can highlight this issue by emailing ec@aff.org.uk.
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