Government rules

The following government rules must be adhered to when taking childcare vouchers. See the HM Revenue & Customs website for further details.

• Childcare vouchers are free from tax (for employees) and National Insurance Contributions (for employers and employees) up to a maximum of £55 per week, or £2,916 per year. For more information, click here.

• Employees’ net pay (salary after vouchers) must not go below £97 per week or £421 per month. This is to ensure the minimum amount of NI is paid and employees’ state benefits, such as Statutory Sick Pay, are not affected.

• Vouchers are available to employees of a company only.

• Employers must make the scheme available to all employees. For more information, click here.

• Childcare vouchers can be used to pay for all children up to the ages of 16, or more precisely up to 1st September following the child’s 15th birthday, or 1st September following their 16th birthday if the child is disabled. For more information, click here.
  
  
• The employer must keep a record of the child’s date of birth and a note of the relationship between the employee and child. Please note that the standard Salary Sacrifice Agreement fulfils this function.  For more information, click here.

• The employee paying for the child’s care must be either the parent or step-parent of the child, or have parental responsibility over the child. For more information, click here.

• Childcare vouchers must be used to pay for registered or approved childcare.
  For more information, click here.

The employer must keep a copy of the scheme rules that includes:

• A requirement for employees to notify their employer of any change in circumstances in relation to the child or childcare
• A record of the childcare provider’s name and registration or approval number
• A note of when the childcare provider’s approval is due to expire.
  See HM Revenue & Customs website for more details.