The Government’s Tax-Free Childcare scheme is available to all eligible College employees. Please see below for further details.
Following the introduction of Tax-Free Childcare, childcare voucher schemes have been closed to new entrants. Therefore, the College’s childcare vouchers scheme is now only available to those currently in the scheme, subject to their continuing eligibility.
The information below explains more about the Government’s Tax-Free Childcare scheme. Details are also available on childcare vouchers for those remaining in the scheme. The College’s childcare vouchers schemes are discretionary (and do not form part of employees’ terms of employment). Provision of these benefits will be reviewed from time to time and the College reserves the right to vary or discontinue the arrangements outlined below.
A new Government-run scheme has been launched called Tax-Free Childcare (TFC).
To assist with your decision on whether TFC is beneficial to you, and to find out what you are eligible to receive, please view the following information:
- The Government’s childcare calculator
- HMRC’s Childcare Choices
- Computershare Childcare Vouchers - Give yourself a choice (if you are currently receiving childcare vouchers)
If you wish to discuss your current childcare vouchers, please contact Computershare on their freephone number: 0345 002 1111.
Childcare support scheme
1. What is the Childcare Support Scheme?
A monthly allowance taking the form of free childcare vouchers is available to eligible employees who are currently in the College’s childcare vouchers scheme. Please note that this scheme is now closed to new entrants – view the relevant tab to learn more about its replacement, Tax-Free Childcare.
The vouchers are provided through the College childcare voucher provider, Computershare, and may be used to meet the cost of childcare in College or independent nurseries. The allowance is not available as a cash supplement to employees’ salaries.
2. Who is eligible?
Every Imperial College parent currently in the childcare vouchers scheme with a child under five years of age, other than those paying for a child in the Imperial College Early Years Education Centre (EYEC). Consequently, a parent paying for a child at EYEC would be ineligible for free childcare vouchers for a second child.
If both parents are employed by the College and currently in the childcare vouchers scheme they can both apply for free vouchers. An exception to this is where the parents have a child at EYEC, in which case only the parent not paying the nursery fees will be eligible for the free vouchers.
3. How much is available?
The value of vouchers per Imperial College parent currently in the childcare vouchers scheme is £124 per month. The payment can be claimed from the child’s birth and the final payment will be made in the month of the child’s fifth birthday, provided you are still employed by the College. Vouchers will be withdrawn as soon as your child takes up a place at EYEC.
4. What am I entitled to?
If you are already registered on the Computershare scheme, you will need to apply for at least £124 per month of Computershare vouchers if you want to claim the full allowance from the College. These will be provided free of charge. If you are a higher rate tax payer, this is the maximum you can claim. However, if you are a basic rate tax payer you can apply for up to £243 in total, in which case the first £124 will be provided free by the College, and the remainder (up to £119) will appear on your payslip as a salary sacrifice.
It is important to provide Computershare with your child’s date of birth, because this is how we know whether or not you are eligible for free vouchers. By registering with Computershare, you accept their terms and conditions, which include giving consent that the College can be supplied with your child’s date of birth and age.
If you have more than one child, it is important to ensure that the date of birth of each of them is recorded on Computershare’s system. Provided that your youngest child is under five and you are not paying for any children in the EYEC, you will continue to receive free vouchers.
Further information can be obtained from your HR representative if necessary.
5. How do I receive my free vouchers?
Vouchers will be credited to your Computershare account.
6. Do I receive the sum for each child I have?
No. Each parent will be eligible for £124 per month (so two Imperial College parents can both claim an allowance). It is an allowance per parent rather than per child, so as to ensure that the College operates within the tax concessions available under the Government childcare voucher scheme.
The Government’s new Tax-Free childcare scheme operates on a per-child rather than per-parent basis.
As long as one of your children has not yet reached their fifth birthday and you continue in the College’s employment you will continue to receive the monthly allowance automatically.
7. I have a child in EYEC – am I eligible?
No. However, if you have applied but not yet been offered a place at EYEC, you can participate in the Childcare Support Scheme and will then be able to use your vouchers at a later date if you are offered a place (or otherwise at any independent nursery who has registered with Computershare).
8. Do I have to use the allowance on childcare vouchers?
Yes. The College scheme is designed to off-set the cost of tax-approved childcare. By using the workplace nurseries or childcare voucher scheme, we can provide the sum completely tax free. Childcare vouchers can be used for a whole range of private childcare.
9. I am not yet incurring childcare costs. Can I claim the free vouchers anyway?
Yes. If you are registered with Computershare, you can begin claiming vouchers immediately from the day your child is born.
10. My childcare costs exceed £124 per month; can I purchase more childcare vouchers?
Any amount up to £124 per month will be funded by the College, but parents already registered on the childcare vouchers scheme can purchase more vouchers, up to their personal tax-free limit, if they wish to do so. In practice this will only apply to basic rate taxpayers and those who had already registered with Computershare prior to April 2011 (when the law changed). In such cases, the excess over £124 will be treated as a salary sacrifice through payroll. Details of the current maximum tax-free allowances may be found on the Childcare Vouchers tab. It is not advisable to exceed these allowances as any excess would incur Computershare’s handling charge (which you will need to pay) and carries no tax benefit. It is simpler and cheaper to pay excess childcare costs directly to your childcare provider.
11. Does this allowance form part of my contract of employment?
The allowance is a discretionary scheme offered by the College which we will review every August and it is therefore not contractual. The allowance may be used on childcare vouchers or workplace nurseries and is tax free, so it does not have to be declared as additional income on a tax return. The arrangement is, however, part of a salary sacrifice arrangement, so please read the guidance provided by Computershare carefully so you understand the parameters of the scheme.
WHAT ARE CHILDCARE VOUCHERS?
The term “voucher” is misleading. Paper vouchers are a thing of the past; the transactions are now entirely electronic.
Parents have an online account with Computershare, into which credits are deposited by the College. The nursery which your child is attending needs also to register with them, and you can then direct funds from your account to the chosen the nursery.
There are several childcare voucher providers operating in the UK. We chose Computershare because they are one of the biggest – with thousands of nurseries already signed up to their system – and have a good reputation for customer service.
For reasons of administrative efficiency, the College is not able to provide support through other voucher providers.
HOW DO I CONTACT COMPUTERSHARE?
Website: Child Care Vouchers
Freephone: 0345 002 1111
Imperial’s Employer Scheme Reference Number: 0000436867
WHERE DOES THE FUNDING COME FROM?
(i) From the College’s Childcare Support Scheme, which provides free vouchers to eligible parents already registered with the childcare vouchers scheme.
(ii) By sacrificing part of your salary from Imperial College – an explanation of the principles of salary sacrifice is available from Finance's Knowledge Bank.
LIMIT ON THE MAXIMUM AMOUNT OF CHILDCARE VOUCHERS
In addition to the general limitations applying to all salary sacrifice schemes (see FAQ No 3 on the salary sacrifice page), childcare vouchers are limited to an annual amount which is dependent upon the employee’s highest tax rate:
- For basic rate (20%) taxpayers: £2,916 per annum (£243 per month)
- For higher rate (40%) taxpayers: £1,488 per annum (£124 per month)
- For additional rate (45%) taxpayers: £1,164 per annum (£97 per month)
The amount of savings you receive will be dependent on your current salary, tax bracket and NI contributions, but can be significant over time. The Salary Sacrifice page explains how you can work out roughly how much you will save.
There are no administrative costs for you to participate in the scheme, and there is no cost to your carer to register.
IMPORTANT DEADLINES FOR LEAVING THE SCHEME
To cancel your vouchers, please give as much notice as possible (up to 30 days) to Computershare through their website or by phone.
REFUNDS OF CHILDCARE VOUCHERS
HM Revenue and Customs have introduced additional flexibility into the regime for tax-free childcare vouchers. Previously, a salary sacrifice, once made, could not be revoked retroactively, and it followed that it was impossible to reimburse unused childcare vouchers.
However, a recent HMRC publication has indicated (in the middle of page 4) that retroactive amendments to a childcare salary sacrifice are lawful, if mutually agreed between employer and employee.
The College will normally agree to an employee’s request to make such a retroactive change, subject to an administrative handling charge of 10% of the value of the vouchers refunded.
Since the original sacrifice gave the employee relief from tax and NICs, any refund will need to be processed through payroll in order to collect the tax and NIC due. If you wish to claim a refund of childcare vouchers, please send an email to firstname.lastname@example.org stating the value of vouchers which you wish to be refunded.
If vouchers which have been provided free of charge under the Childcare Support Scheme (i.e. at the College’s cost) or during a period of SMP are no longer required, they should be returned to the College. No re-imbursement will be made.
EXPIRY OF VOUCHERS
Childcare vouchers are valid for a period of six years from issue.
MATERNITY, ADOPTION, SHARED PARENTAL LEAVE AND CHILDCARE VOUCHERS
Further information on maternity, adoption and shared parental pay and childcare vouchers can be found in the Maternity, adoption, shared parental pay and childcare vouchers document.