Tax Deductible Childcare At Last (But Only For The Employed!
Oct 24th, 2007 | By Nicola Cairncross | Category: Money Gym | Diaries
One of my biggest moans while the kids have been growing up is paying for childcare out of post tax income.
After all, if I hadn’t had childcare, I wouldn’t have been able to work or run a business, but there is no allowance for that when doing your accounts.
However, for those who are employed there is a little known scheme that not only saves YOU money, but will save your EMPLOYER money in NI contributions.
And I can see how those of you who have a LTD company, could benefit too (but see your accountant first!)
Martin Lewis, best known as the Money Saving Expert, has been giving people tips on how to MAKE more money for a change, coming up for Christmas. While I was browsing through the www.GM.tv website, I cam across this little nugget of gold……
(note the very small fish in the picture)
"Childcare costs are a huge drain on the finances. Yet the little-known ‘Childcare Voucher’ scheme can save you £1,000s on nursery fees or child minder costs every year.
It allows you to pay for childcare from your pre-tax income. While this mightn’t sound a big deal, the impact is huge. For every £1,000 a basic rate taxpayer earns, after tax and national insurance is deducted, they only actually receive a little under £700 in their pay packet. By using childcare vouchers, the whole £1,000 pays for childcare so there’s a £300 gain per £1,000 of childcare."
e
