NIM02471 - Class 1: vouchers, non-cash vouchers, qualifying childcare vouchers from 6th April 2005. How to calculate the exempt amount (the general rule).
Paragraph 7(1)-(4) of Part 5 of Schedule 3 Social Security (Contributions) Regulations 2001
An employee is only entitled to one exempt amount. This is so even if qualifying childcare vouchers are provided for more than one child.
Calculating the exempt amount
The exempt amount is calculated by the formula E x QW where:
- E is the total of:
- 拢55; or for those new to a childcare voucher scheme from 6 April 2011, 拢55 a week for ordinary rate tax payers 拢28 for higher rate tax payers and 拢25 for additional rate tax payers plus the administration costs for the voucher
- QW is the number of qualifying weeks:
a) for which the employee has been employed by the secondary contributor during the tax year in which in which the qualifying childcare voucher is provided; and
b) for which no other qualifying childcare voucher has been provided by the secondary contributor.
Meaning of 鈥渁dministration costs鈥�
The administration costs for a voucher means the difference between:
- the cost of providing the voucher; and
- its face value ie, the amount stated on, or recorded in, it as the value of the provision of childcare that may be obtained by using it.
鈥淪econdary contributor鈥�
Where:
- an employee has two or more employments; and
- the earnings from which fall to be aggregated under either regulation 14 or 15 of the above Regulations,
The reference to 鈥渟econdary contributor鈥� in (b) of the definition of QW above is a reference to the 鈥渟econdary contributor鈥� in respect of any of those employments.
For: