How do childcare vouchers work?

Childcare vouchers are designed to make childcare more affordable. The scheme works by issuing parents with tax and National Insurance (NI) free vouchers through their employers as part of their salary, to pay for all, or part of their childcare costs. It also provides a simple and efficient way for carers to receive payment, as the vouchers are redeemed by the carer, individually or in bulk, free of charge and funds are paid out to the carers the same day.

Carers can claim tax and National Insurance savings on the first £55.00 per week of their childcare costs — providing savings of over £1,000 in many cases. The vouchers can be used for any form of childcare, from birth to 15 (or 16 if disabled) and can include nurseries, childminders, nannies, breakfast clubs, after school clubs and holiday clubs, if the childcare is approved or registered.

The vouchers can also be saved up to pay for full-time childcare during school holidays.

For further information and guidance visit the HM Revene and Customers website http://www.hmrc.gov.uk/childcare/

If you would like further information on this topic, please contact the Information Service team who will be happy to help.

Email: Information Service
Tel: 020 7697 2595

Last updated: 18/08/2008