Personal tax: Childcare vouchers trap

Personal tax: Childcare vouchers trap

Employees continue to receive misleading advice about the merits of accepting childcare vouchers and HMRC's 'better off' calculator is 'unfriendly and confusing' despite recent improvements according to the CIOT's Low Incomes Tax Reform Group.

HMRC's website tells tax credits claimants: 'If your employer offers you childcare vouchers to help with your childcare costs it may affect the amount of tax credits you can get.' But claimants are presented with three tests to determine whether they can use the calculator and are told that the results 'are only a guide' to whether they would be better off taking the vouchers. Since 2005 LITRG has been critical of the information given to parents by Government and voucher providers. 'Tax relief on childcare vouchers may help high earners but families on low to middle incomes are generally better off claiming tax credits '...