The following conditions relate to all childcare support provided by an employer:
Available to all staff
The childcare support should be offered in a scheme in which all employees are eligible to participate. The ‘available to all’ condition for childcare vouchers and directly contracted childcare is not breached where workers who earn on or near the National Minimum Wage (NMW) are unable to join an employer’s scheme due to the requirement to safeguard payment of the NMW in full. However, childcare support for workplace nurseries must be offered in a scheme in which all employees are eligible to participate, including workers with earnings at or near the NMW.
A child qualifies up to 1 September following their 15th birthday, or 1 September following their 16th birthday, if they are disabled. The child must be the child or stepchild of the employee or a child for whom the employee has parental responsibility.
Registered or approved childcare only
To qualify for the exemption, any childcare provided by an employer or for which childcare vouchers are used must be registered or approved.
You have two options if you choose to offer childcare vouchers:
- Voucher providers can operate childcare voucher schemes on behalf of employers. They will charge an administration fee for the service. However, you will remain responsible for the correct deduction of tax and payment of NICs even if you use these companies;
- You can produce and administer childcare vouchers yourself as long as you make sure the conditions for tax and NICs exemption are met and you keep records to support your scheme.
In our experience for husband and wife Limited Companies the second option is better, the administration is easily managed and it saves the company money.
Who provides registered childcare within the UK?
The registered requirements are slightly different in Wales and Scotland so if you are not in England be sure to check your childcare qualifies before you start your own Limited company voucher scheme.
In England only:
A person registered under Part 3 of the Childcare Act 2006. This will include persons on the following registers operated by Ofsted
— The Early Years Register
— The General Childcare Register – compulsory part
— The General Childcare Register – voluntary part.
Schools – care provided by the governing body of a school is approved if it takes place
— outside normal school hours (this means the normal hours of compulsory education adopted by the school as appropriate for the age of the child)
— on school premises, or
— on premises that are covered by the inspection of the whole school activity by Ofsted or the equivalent inspection board for certain independent schools.
Other care providers
A domiciliary worker or nurse from an agency registered under the Domiciliary Care Agencies Regulations 2002 providing childcare in the child’s home.
If you would like help with the administration of setting up your company childcare scheme then contact Clearways Accountants via the contact form below or on 01737 244298.