The new financial year is looming and Busy Bees Benefits
is helping customers to ensure their Childcare Voucher scheme continues to meet
HMRC rules.
All employers offering
Childcare Vouchers to their staff are required to carry out Basic Earnings
Assessments annually.
By providing customers
with an updated, electronic Basic Earnings Assessment (BEA) tool via their
online account, Busy Bees Benefits is making it as easy as possible for
organisations to administer their Childcare Voucher scheme at this busy time of
year. The service also ensures employers’ schemes do not become invalid, which
would mean there would be no entitlement to tax relief.
Childcare
Vouchers are a simple way that working parents can save on the cost of
childcare. It’s just a matter of swapping a part of their salary for Childcare
Vouchers, which are non-taxable and exempt from National Insurance
contributions. If parents take the full amount of vouchers available to them,
currently £55 per week, they can save up to £933 each year.
Although
the majority of parents use vouchers for registered childcare for pre-school
children, be it a nursery, nanny, au pair, or childminder, Childcare Vouchers can
also be used for older children to pay for schemes such as out of school clubs
and activity camps.
The amount of vouchers each
employee can exchange depends on their tax band. This was introduced three years
ago to make the system fairer.
Parents who joined the Childcare Voucher scheme after April 2011 can only
exchange the maximum allowance of £243 per month or £55 per week if they are
Basic Rate Taxpayers.
When completing the Basic Earnings Assessment each year,
the employer is required to confirm whether each employee is a basic, higher or
additional rate tax payer and if their Childcare Voucher order is in line with
the amount they are able to claim. BusyBees Benefits’ straightforward Childcare Voucher system asks employees
to complete a basic earnings assessment online:
- Employees are asked to input their tax code, gross income and details of any other salary sacrifice schemes they use and the system instantly assesses whether the individual is a basic, higher or additional rate tax payer and ensures the correct amount of Childcare Vouchers are requested.
- The system also provides an online storage system so these details can be readily retrieved when required.
The
HR and Payroll Advisor at a UK college said “After a meeting with Busy Bees
Benefits we agreed to switch to our scheme as their system was easy to use and
removed much of the administrative burden for our payroll staff.”
Employers must also ensure
that no employee’s salary drops below National Minimum Wage levels after their
Childcare Voucher has been deducted. Busy Bees Benefits has again used its
innovative system to deliver full compliance.
Protected
Rights
Employees who were registered
on a Childcare Voucher scheme before 6th April 2011 and have taken at least one
deduction for Childcare Vouchers in each tax year since then, can still order
the full allowance of £243 per month, whatever their earnings. Changing voucher
provider will not affect employees’ protected rights. Changing employer, other
than TUPE transfers, will mean they lose their rights. Busy Bees Benefits
informs employees with protected rights if they have not ordered Childcare
Vouchers during that tax year to ensure they do not lose their full entitlement.
If you are an organisation facing
a pile of administration for your employee benefits, contact 0330 333 9100 to
see how Busy Bees Benefits can help reduce your workload.
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