Q. I've got into a muddle over childcare vouchers. When I started the voucher scheme in 2012 all my employees were taxed at 20%, so they all received vouchers worth £55 per week. Now some are paying tax at 40%, but they are still all getting the full amount of tax-free vouchers. What should I do?

A. As an employer you are required to review all your employees' relevant earnings at the beginning of the tax year, and adjust the amount of tax free childcare vouchers for any employees who are expected to fall into the higher tax brackets. If at the time of that review it was not foreseen that some employees would be paying tax at 40% at some point later in the year, you are not required to adjust the amount of tax free childcare vouchers. The level of tax relief for the vouchers is set at the beginning of the tax year, or when the employee takes up employment with you in that year.

If your review of relevant earnings in April 2013 was incorrect, you may have given vouchers in excess of the tax free amount to some employees. In those cases the excess amounts should be reported on the P11D forms for those employees.

Q. In September 2013 I started working through my own company but I haven't drawn a salary yet. Can I award myself tax free childcare vouchers as an employee of my company? I was previously on a salary of £50,000 with my former employer. Would that affect the amount of childcare vouchers I can receive tax free in this tax year?

A. As an employee of your company you can receive childcare vouchers. The other conditions of a childcare voucher scheme must also be met, For example, all other employees of your company should be offered childcare vouchers on the same terms. Your previous salary is not relevant to the amount of tax free childcare vouchers you can receive from your current employer. If your expected salary for this tax year (don't include dividends or bonuses you may receive), will be less than the basic rate band - pro rata over the rest of the year, you can receive the maximum of £55 of tax free childcare vouchers per week.

Q. Our son is now old enough to attend nursery. Can my company, as my employer, help out with the nursery fees?

A. Your company can provide you with childcare vouchers to be redeemed at registered child care providers, and the first £55 per week of vouchers will be tax and NI free. If both parents work for the company they can each get £55 worth of child care vouchers per week. However, if you pay tax at 40%, you can only receive £28 per week of vouchers tax fee. Those that pay tax at the new highest rate of 45% (from 6 April 2013) can only receive up to £25 per week of tax free vouchers.


The company must offer childcare vouchers to all it's employees who work at the same site, it cannot exclude any employees, but employees can opt out. However, only parents with children aged under 16 can qualify for childcare vouchers. There are a number of other rules which are set out in the HMRC booklet E18: How you can help your employees with childcare.