How to ensure compliance with the law on childcare vouchers
Author: Paul Tew
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- Be aware that there is a limited tax and national insurance exemption in respect of childcare vouchers for the purpose of paying for qualifying childcare.
- Take into account that, for the limited exemption to apply, certain qualifying conditions have to be satisfied. If the qualifying conditions for the limited tax exemption are met, certain records must still be kept.
- Be aware that, although you can arrange for a voucher company to administer record keeping on your behalf to support the scheme, you remain responsible for producing records and making returns to HM Revenue and Customs.
- Take into account that being in receipt of childcare vouchers can affect employees' entitlement to tax credits.
- Although you are free to devise whatever childcare benefits best suit your business needs you must ensure that any salary-sacrifice arrangements that are set up are effective for tax and national insurance purposes.