Childcare vouchers are a simple way for an employer to assist their employees with the costs of childcare. The first £55 per week in Childcare Vouchers supplied by the employer will be exempt from both tax and NIC’s for employees.

Childcare voucher schemes
It is common for your employer to sign up to a childcare voucher company and will pay that company a small fee for their service. The voucher company will either supply you directly with your childcare vouchers or they will provide your employer with them. Employees in receipt of childcare vouchers may be able to use them to 'pay' their nanny or other registered forms of childcare. The nanny will then redeem the value of the voucher from the childcare voucher company, usually by direct payment into their bank account.

Childcare vouchers can save money?
Childcare vouchers can be offered to you in addition to your cash salary but are more commonly offered as a "salary sacrifice". This means that you sacrifice a specific amount of your salary and instead receive that amount in childcare vouchers. Childcare vouchers are exempt from National Insurance Contributions (NIC), so you will only pay NIC on the reduced level of your salary, saving up to 11% on NIC. This saves money on childcare costs.

What sort of childcare can they be used to pay for?
Childcare vouchers can only be used for registered or approved childcare costs. Your nanny will need to be "registered" through the 'Ofsted Childcare Register' (OCR). Your nanny will also need to register with the voucher company in order to reimburse the value of the vouchers they receive.
 
Only Ofsted Regiastered Nannies can accept childcare vouchers In order to receive the childcare voucher reimbursements the nanny will need to register their details with the childcare voucher company. This is usually a record of contact details, registration number
where appropriate and bank account details. There is no cost to the nanny in receiving payment through childcare vouchers.

Getting your nanny "registered" for Vouchers
The nanny must apply to OFSTED for his/her application form. For more information about the scheme and contact details for Ofsted please follow the link www.ofsted.gov.uk.