Parents' Frequently Asked Questions
You can save up to £1,195 a year in tax and NI with Rascals childcare vouchers!
Who are Rascals?
Rascals Vouchers Limited is a Childcare Voucher provider. Your employer lets us run the childcare voucher scheme for them. We receive the money each pay period (just like your bank does) and then we pay your carer following your instruction.
What is the Childcare Voucher Scheme?
Childcare vouchers are part of a Government Scheme to help working parents with the costs of childcare.
How does the Government help?
With effect from April 2006 the Government offers tax and NI savings on up to £55 per week of childcare vouchers. This tax and NI saving is available to every working parent. You as an employee can elect to receive childcare vouchers from your employer instead of the equivalent amount of cash salary. The voucher part of your salary will be tax and NI free.
How much do the savings add up to?
If you are a basic rate taxpayer you can save tax and NI totalling up to £904 per year and if you are a higher rate taxpayer then you can save up to £1,195 per year.
The savings you'll make are based on your earnings and not on how many children you have. If you receive any tax credits, childcare vouchers may not save you any money. Check out our Tax Credits Information page for more information.
- For employees who elect to receive the maximum amount of vouchers and who earn below £42,035 per year, may save tax at 20% and NI at 11% (contracted in) the per annum saving will be £904.
- For employees who elect to receive the maximum amount of vouchers and who earn below £42,035 per year, may save tax at 20% and NI at 9.4% (contracted out) the per annum saving will be £857.
- For employees who elect to receive the maximum amount of vouchers and who earn above £42,035 per year, may save tax and NI depending on actual earning the per annum saving will be up to £1,195.
What is Salary Sacrifice?
Salary sacrifice means that you give up some of your cash pay and receive instead childcare voucher benefit to the same value. By receiving some of your remuneration in childcare vouchers this means that you are able to save money on your childcare costs. This works because the government do not charge you Tax or National Insurance on childcare vouchers of up to £55 per week or £243 per month. Technically this is a change to terms and conditions of employment.
Can men and women both benefit from the Rascals childcare voucher scheme?
Yes, both parents can receive vouchers if they are working. As a family unit you can then double your savings if you both receive vouchers. If you are both basic rate tax payers and take the maximum of £55 per week of vouchers, then your family could save up to £1,808 per year and with two higher rate taxpayers you could save up to £2,390 per year.
Am I eligible to join the scheme?
You are if you are the parent or guardian of a Qualifying Child (see next question). The parent/guardian must maintain the child or stepchild wholly or partly at their expense or the parent/guardian must have parental responsibility for the child who resides with them.
What's a Qualifying Child?
A child qualifies under the scheme until the 1st September following his/her 15th birthday or 1st September following his/her 16th birthday if he/she is registered as disabled.
I'm an Aunt/Uncle/Grandparent of a child can I join?
No, sorry, you can't, unless you also happen to be the legal Guardian of the child, of course.
What types of childcare providers can I use?
You may only use formal or registered childcare providers under this scheme. Carers must either be registered with Ofsted or with the equivalent authority in Scotland (The Care Commission), Wales, Northern Ireland, or the new Childcare Approval Scheme.
Registered and approved childcare includes:-
- OFSTED Childcare Register – Compulsory (England)
- OFSTED Childcare Register – Voluntary (England)
- Schools (England)
- Local Health and Social Services Trusts (Northern Ireland)
- The Care Commission (Scotland)
- Childcare Approval Scheme (Wales)
- The Care Standards Inspectorate for Wales
For more information about ‘registered’ or ‘approved’ childcare visit http://www.hmrc.gov.uk/leaflets/ir115.pdf
Do I have to change my carer to join the scheme?
No, so long as your carer is a formal or registered carer, then you need change nothing. The only difference will be how they are paid.
Can a relative who looks after my child receive vouchers?
No, relatives are not eligible to receive vouchers. The only exception to this is if the relative runs a registered childcare business and looks after children other than those they are related to in a location that is not the Qualifying Child's home. (Complicated we know, but there we are )
I've got more than one child does that change anything?
No, you can use your voucher benefit to pay any formal carers that you use for any Qualifying Child.
I've got two children can I get double the saving?
Nice try but afraid not. The tax and NI exemption is per working parent and not per child.
Does my childcare provider have to accept payment using electronic vouchers?
No, but there is no cost associated with them accepting this form of payment. The childcare voucher scheme is a Government backed initiative and it will become more & more commonplace in the future as a way to pay for childcare. The savings available to parents using the scheme are too great to ignore. At Rascals we understand the importance of your carer to you and as such we work really hard to make sure we look after them too.
How will it affect my childcare provider?
Not much really. They'll have to tell us about themselves and their registration details so that we know they qualify under the scheme. They'll have to give us their bank details so we can pay them for you. We'll also give them good clear remittance advice when we make payment to them so they know the money is from you. Other than that, this scheme won't affect them.
When will I receive my electronic voucher benefit if I am paid monthly?
The money will be credited to your Rascals account on payday. You can elect to have up to £55 per week in vouchers. This equates to £243 per month.
When will I receive vouchers if I am paid weekly?
Please ask your employer about this if you are weekly paid as sometimes schemes vary.
How will I receive vouchers?
The value of the electronic vouchers that you have chosen to receive will be sent to us and credited to your Rascals account. You then have complete control over your money. You can choose when and who to pay. (A bit like on-line banking but you can't buy your shopping with it.)
What if I have more than one childcare provider?
If you have one care provider that costs more than £243 each month then you only need to register that provider and use your voucher value to pay them. If you have two or more providers costing less than £243 per month you can register them both and then choose how much to pay each one. It's really up to you.
What do I do if I have different care providers in term time and school holidays?
Register all your providers and then you choose which one you pay, how much and when. You can register new carers at any time (click here to do it now).
What if I only use child care in the school holidays?
Work out how much the care you use in the holidays costs. Divide that amount by twelve and then join the scheme and ask for the monthly amount in voucher benefit. You can save up your voucher benefit and use it at any time in the future. It doesn't run out.
What if I need to leave the scheme and have voucher benefit left over?
When you join the scheme you will sign an Amendment to Contract as you are changing the amount of cash salary you will receive. You can leave the scheme with your employer's agreement due to a lifestyle change (see next question). Any voucher benefit left over will be refunded to your employer who will pay it to you minus any tax and NI due.
What's a Lifestyle Change?
It's an event that occurs that allows you to leave the scheme immediately. Typically, these will include any significant change in your care requirements, the death of a partner or child, redundancy, marriage, divorce, adoption or pregnancy.
What happens if I want to use a different carer?
You can use any formal or registered carer at any time and use your Rascals account to pay them. You'll need to register the new carer with us, but that's easy to do. Click here to do it.
Can I use childcare vouchers on top of the Local Authority childcare assistance for three and four year olds?
Absolutely. Simply deduct the amount that's paid by your Local Authority and you can use vouchers to help pay for the rest.
How can I join the Scheme?
Your employer will invite you to do this at the time their scheme gets going. If your employer hasn't got any plans to do this yet, ask them to contact us, or give us their details here and we'll get in touch with them.
When you join the scheme you'll agree to vary your contract and receive a voucher benefit instead of cash salary. You will not have to pay tax or NI on the part you receive in vouchers.
You'll also have to tell us which carer/s you want to use. If we already know who they are, then nothing else needs to happen. If we don't know them, we'll contact them to get their details and set them up on our system. Alternatively, you can print off one of our carer forms here and fill it in and return it to us.
Will my pension be affected?
To find out any affect on your employer's pension scheme, please contact your Pension Trustee, HR department or your own advisor.
Your basic State Pension should not be affected provided you pay the minimum payments for NI. There may be a small effect on your Second State Pension. Please ask your local tax office for further information.
Will my Statutory Maternity Pay (SMP) be affected if I receive vouchers?
If you become pregnant, you need to ensure that your SMP is not reduced in any way. You should leave the Rascals Childcare Voucher Scheme 23 weeks before your due date i.e. when you are 17 weeks pregnant.
I am on or near the National Minimum Wage, can I receive vouchers?
No, you may not receive vouchers if doing so takes your cash earnings below the National Minimum Wage. This is a legal requirement. Nor can you have vouchers if your earnings are at or near to the Lower Earnings Limit (LEL). Click here to see the current level of the LEL.
Will any other benefits such as Statutory Sick Pay and my State Pension be affected if I join the voucher scheme?
No, you'll still be paying enough NI contributions on your new lower salary (unless your earnings fall below the lower earnings limit (LEL).)
How will Childcare Vouchers affect my tax credits?
The Working Tax Credit (WTC) and Child Tax Credit (CTC) provide support to parents based on their income, number of children and the cost of childcare. By exchanging salary for childcare vouchers the entitlement to tax credits may be affected. As your average earnings will be reduced by the value of the childcare vouchers, you may receive higher payment through the WTC. However, the value of the childcare vouchers may not then be used when calculating the WTC. The childcare element of the WTC therefore may be reduced.
If you are still not sure whether to accept childcare vouchers the following may be able to help you:
Savings and Tax Credit Calculator www.hmrc.gov.uk/calcs/ccin.htm
www.inlandrevenue.gov.uk/childcare or www.taxcredits.inlandrevenue.gov.uk or call the tax credits helpline on 0845 300 3900.
If you do receive Childcare Vouchers then you must advise the Tax Credits office that you are doing so.
Testimonials:
"Thank you so much, when I dropped my daughters deposit at my carer they were singing your praises at how on the ball you were, so thank you so much for making this part of my life so easy, Greatly appreciated!!!"
Natalie, IT operations
“The automated system makes the payment direct to the child carers very simple and with timely invoices every month via email the scheme has virtually no admin required.”
Jo, Architectural Design Practice
“Using Rascals vouchers to pay for childcare has been easy and stress free for me. Once my details were entered via the website, everything else was done for me.”
Samm, Property Lawyers