Childcare vouchers are an employee benefit for all eligible working parents. They are a Government-approved, tax-efficient way of paying for childcare. Childcare vouchers work through a system known as 'Salary Exchange'. This means that you receive the childcare vouchers instead of part of your salary.
Childcare vouchers save you money on registered care for younger and older children as you won't pay tax or national insurance on your selected voucher value. If you join the scheme, you can exchange up to £243 a month of your gross salary for childcare vouchers. The part of your gross salary you exchange for childcare vouchers is tax-free and exempt from National Insurance contributions (NI). Because of this, you can make savings of up to £933 per parent, per year.
You may pay for registered childcare with childcare vouchers. Check that your childcare provider is registered with the relevant body.
Registered childcare includes:
- Day care
- Before and after school care
- Holiday schemes
- Sitter services (Scotland)
- Activity based care e.g. sports and drama coaching
Registered bodies include:
- Ofsted (England)
- Care Inspectorate (Scotland)
- Care and Social Services Inspectorate (Wales)
- Department of Health, Social Services and Public Safety (Northern Ireland)
The childcare voucher scheme is open to all employees, including part-time and temporary employees. (Individuals engaged on a claims basis, including the Temporary Staff Bank, and Postgraduate Teaching Assistants are not eligible to participate).
To take part, the child for whom you intend to use the vouchers must be:
- Your child or stepchild, who is maintained either fully or partly at your expense, or
- A child who lives with you and for whom you have parental responsibility
You can spend childcare vouchers up to the September after the child’s 15th birthday (or the September after their 16th birthday if they are registered disabled)
It doesn’t cost you anything to sign up for childcare vouchers and the scheme applies whatever rate of tax you pay.
Simply complete the online registration form on the Sodexo website or, if you don’t have access to a computer, call Sodexo on 0800 328 7411. You will need a recent payslip, the details of the children you are registering, your childcare provider and what value of vouchers you require – the application will take about 5 minutes to complete.
Step 1. You create an individual account
Step 2. You add the details of your childcare provider(s) to your account
Step 3. You select the voucher amount you wish to receive
Step 4. The vouchers show up as credit in your individual account on payday
Step 5. You can pay your childcare provider(s) directly from your online account.
Once you have registered, Sodexo will send you a confirmation email. You can access your e-voucher account at any time using your username and password.
You can join the scheme at any time. However, please note, you will need to give adequate notice. For example, if you wish to receive vouchers on January payday, you will need to have applied by 31st December.
Your childcare provider has to demonstrate they are registered if you want to pay them using childcare vouchers. If your childcare provider is regulated by a national body such as Ofsted they should have a registration number and a certificate.
You can still join. You will just need to make sure you provide Sodexo Childcare Vouchers with the details prior to setting up your first payment. This can be done via your personal childcare account or by calling the helpline
To meet the rules of the salary sacrifice scheme, when you order your childcare vouchers, you will commit to receiving your chosen amount of childcare vouchers for a fixed period (you cannot vary the amounts month to month). If you have variable childcare costs, please choose your voucher amount carefully.
It may help to base your voucher order on your average childcare costs. Register all your childcare providers with Sodexo and work out how much you need for each provider throughout the year. Add these together and divide by 12 to give you a monthly voucher amount. However, if your expensive childcare months arise before your cheaper months, this could lead to a shortfall.
Please remember that your childcare provider will want to be paid on time, so you may need to order a higher amount initially to avoid shortfalls arising.
E-vouchers work in a similar way to online banking. You are given a personal e-voucher account that you access to arrange payment directly into your childcare provider’s bank account. You can easily monitor your payments and make them when it suits you or set up a regular payment for a set amount, which goes directly into your childcare provider’s bank account on a set day every month.
If you temporarily lose access to the internet, you can manage your account by calling Sodexo’s customer care team on 0800 328 7411.
Adequate notice is required to join the scheme, i.e. you should apply by 31 December to join the scheme from 1 January. Due to tax rules, there is no facility for childcare vouchers to be back-dated to previous pay periods.
The maximum reduction is £243 per month (for basic rate tax payers) and £124 (for higher rate tax payers); the minimum reduction is £10 per month.
Working parents / guardians, both men and women are eligible to participate, provided that their income after the deduction of salary sacrifice does not fall below the national minimum wage (NMW) or National Living Wage (NLW).
Any information which you provide to Sodexo Childcare Vouchers when registering for the scheme and on an ongoing basis must be honest and accurate.
If you are found to be acting fraudulently in any aspect of your childcare voucher scheme membership, your membership will be revoked and you will be required to pay any tax or National Insurance liabilities which arise. You may also be subject to disciplinary action which could result in dismissal from your job.
Childcare vouchers are free from tax and NI contributions for the value of the vouchers you order. The amount you save depends on how much tax and national insurance you pay. If you are a basic rate taxpayer you can save as much as £933 (subject to individual circumstances) per parent, per year. For higher rate tax payers you can make savings of up to £624 per parent, per year. To find out how much you can save visit the savings calculator within the Sodexo Childcare Vouchers application portal, or see below for examples:
Amount you can take
|Up to but not exceeding £43,000 (basic)||£243||£2,915|
|Greater than £43,000 but less than £150,000 (higher)||£124||£1,484|
|Over £150,000 (additional)||£110||£1,325|
*Total earnings include salary, other taxable benefits and allowances. Please speak to the HR department if you are unsure of the value of tax and NI exempt childcare vouchers you are entitled to take.
For all new joiners since April 2011 an annual earnings assessment carried out by the University will categorise you into a basic, higher or additional rate tax payer, which will then decide your maximum voucher amount.
|Total Earnings*/Rate||Amount (per year)|
|Up to but not exceeding £43,000 (Basic)||£933|
|Greater than £43,001 but less than £150,000 (Higher)||£623|
|Over £150,000 (Additional)||£623|
*These savings are subject to changes by HMRC
To qualify for the scheme you must be the parent/step parent or legal guardian of the child. Vouchers are not just for young children: you can claim vouchers for children up to the age of 15 (or 16 if registered disabled) so they can also be used for some afterschool and holiday clubs.
The Tax and National Insurance exemption is per working parent rather than per child. Therefore, whether you have one child or four you will still only be able to claim the saving relevant to your tax bracket. Lower rate tax payers can only take maximum of £243 per month. Higher rate tax payers can only take £124 per month. The minimum is £10 per month.
Yes, the amount of vouchers that a parent can take is limited to the amounts illustrated previously, irrespective of how many children you have. So you could maximise your savings by ensuring that you both take part in a childcare voucher scheme. If your partner’s employer is not currently running a scheme, call Sodexo on Freephone 0800 328 7411 and ask for more information. (Please note all calls are recorded for training and quality purposes.)
A parent / guardian is someone who maintains a child or stepchild (wholly, or partly) at their expense or who has parental responsibility for a child who resides with them. Grandparents, unless legal guardians, are not eligible to receive childcare vouchers.
In April 2011 HMRC introduced new rulings for higher rate tax payers and the potential savings that can be made. Higher rate tax payers joining the scheme after 6 April 2011 are now entitled to have a maximum allowance of £124 per calendar month.
Childcare vouchers can be used to pay for Reception year fees in private schools prior to a child reaching the compulsory school age of five. A child is of ‘compulsory school age’ the school term after a child’s 5th birthday e.g. if a child has their birthday in February, childcare vouchers can be used to pay for childcare until the end of the spring term. They can also be used to pay for before and after school care for older children at a private school and also for the boarding element of boarding school fees, providing that these elements are invoiced separately.
Parents, step parents and guardians may not receive childcare vouchers as payment for childcare. No other relative of the child may be paid with childcare vouchers unless they run a registered childcare business, such as a nursery, and the care is not provided in the child’s home.
Yes, you may use childcare vouchers if your Local Authority does not cover all of your childcare costs.
You will be provided with your own secure online voucher account or you can call Sodexo’s free-phone service on 0800 161 3042 who will manage your account for you. On payday each month, the amount you have requested will be deposited into your account for you to make payments to your childcare provider when ready. If you pay the same carer the same amount each month you can create an automatic payment, which will require no further action from you, unless your circumstances change.
You can access the online service 24/7 to check your balance and make payments. Phone lines are open Monday to Friday 9am-5.30pm.
Your provider will receive a BACS payment into their account on the date you specify, or within 24 hours of receiving your instruction if you need to make an immediate payment. Sodexo will send a remittance advice by email so that your childcare provider knows who made the payment.
You can pay as many childcare providers as you wish providing they are registered with Sodexo Motivation Solutions. If you wish to add a childcare provider to your account, simply go online and add them using our comprehensive system. Should one childcare provider charge more than £243 then you may find it easier to use all your vouchers / voucher credit for that one provider.
If your childcare costs exceed your childcare vouchers you may either pay the balance directly to your child carer or use the flexible voucher top up, which allows parents to top-up their voucher account balance with their own money.
This not only allows you and your child carer to keep track of your payments more easily but your child carer will only receive one payment from you rather than two. To ensure both receipts into your voucher account are correct and any refunds made to you are accounted for, we will track both receipts separately to avoid any miscalculations.
Voucher top-ups allow parents to top-up their voucher account balance with their own money. This means that when your childcare costs exceed the value of your vouchers you can make a single payment (per month) to your child carer directly from your account. You can top-up via a direct debit if the top-up is a fixed amount or make a secure top-up payment using your debit or credit card.
Unused childcare vouchers will be carried forward in your account for future use, so you can save them up for times when you need more childcare. Your vouchers will only expire when your child is beyond the eligibility age.
As refunds are not permitted, we recommend that your account balance should not exceed your expected childcare costs.
Vouchers last for up to 30 months, so you can save them up for times when you may need extra childcare throughout the year. All vouchers expire on their expiry date. Expired vouchers will still be displayed in your account and can be reissued to you once you validate who you are, your child’s details and your childcare provider.
HMRC have recently changed their guidelines to allow you to come out of the scheme at any time with the University’s approval. This means that you can spread the cost and save your vouchers each month to make the cost of the long summer holidays more manageable or just join the scheme for a few months during school holidays. When you wish to opt out of the scheme, your written request to do so will supersede the amendment to contract you initially signed. Simply complete the withdrawal form and return it to the address on the form.
The University will ask you to commit to receiving childcare vouchers for the duration of your salary sacrifice agreement. You will only be allowed to change your voucher amount once a year between the end of August and beginning of September (changes will be effective from September’s payday), unless your circumstances change.
During this period, you will be able to amend your voucher amounts via your Sodexo portal.
To withdraw from the scheme during this period, you should complete the PD12a 2016 and return it to the address on the form.
You will only be allowed to change your voucher amount or to leave the scheme at other times of the year if you experience any of the significant lifestyle changes listed below:
- pregnancy/maternity or adoption leave
- extended sickness absence
- reduction in working hours
- redundancy of partner
- significant change in childcare arrangements (eg child moving from pre-school mursery to school)
- child reaches the age of 16
- death of a child/partner
- change in entitlement to tex credits
You need to give adequate notice of any changes to your voucher amount (including cancellation), i.e. changes effective for January's pay should be notified by 31st December.
To withdraw from the scheme under these circumstances, please complete the PD12a 2016 and return it to the address on the form.
To amend your amount under these circumstances, please complete the amendment form PD12b and return it to the address on the form.
You will not be permitted to change your voucher amount because you have over-estimated or under-estimated the amount you need or because you have built up a surplus of vouchers, other than between the end of August and beginning of September (changes will be effective from September’s payday), unless there is a significant lifestyle change.
Under HMRC rules, refunds are only allowed if you are unable to use your vouchers as a result of exceptional and unforeseeable circumstances.
If you have over-estimated the amount of vouchers you need and have a surplus of vouchers, it will not be possible to reimburse these to you but you will be able to use them for out-of-hours care and holiday play schemes.
(Any refunds will require the agreement of the University. Refunds must be processed through PAYE, so tax and National Insurance will be deducted. Please note that large refunds may take your pay into the next tax band. You must not accept any cash or change from your childcare provider in respect of your childcare vouchers.)
If your last salary sacrifice deduction was over 12 months ago, under HMRC scheme rules, you will need to reapply for the scheme as a new joiner. To do this please call 0800 328 7411. If your deductions have not been suspended for more than 12 months please contact the Employee Services team directly to restart your enrolment (firstname.lastname@example.org).
When you choose to exchange part of your salary for childcare vouchers, your remaining salary must not be lower than the National Minimum Wage or National Living Wage. If your gross pay falls below the Lower Earnings Limit, you may lose entitlement to some state benefits. The University may restrict or cancel your ongoing voucher order in order to meet these requirements.
It is not possible to sacrifice statutory payments, so the University of Exeter may override your voucher order if you have insufficient non-statutory pay. For more information about Statutory Maternity Pay and childcare vouchers please visit Maternity Salary exchange.
You will enter into a salary sacrifice agreement each time you order childcare vouchers. The salary sacrifice agreement acts as a formal variation to your employment contract.
Your salary sacrifice agreement will be available for you to view and download from your online account. You can also request a paper copy of the agreement from Sodexo Childcare Vouchers.
Taking childcare vouchers may have an effect on Tax Credits. Every family situation is different and we cannot comment on your individual circumstances but you can contact the HM Revenue & Customs Tax Credits helpline on 0345 300 3900, they will be able to help you decide what is best for your family. They also have an online tool called the ‘Childcare vouchers and tax credits better off calculator’ to help you decide whether you’ll be better off with childcare vouchers. You can access this tool at www.gov.uk/childcare-vouchers-better-off-calculator.
Children aged three or four may be eligible to receive a free part-time nursery place through the Government’s early education policy. Using childcare vouchers won’t affect your child’s entitlement to a free place. If your child does receive some of their care free of charge, you can still use vouchers to pay for the balance of your child’s care.
The University will keep a record of your full notional salary (defined as the salary you would be receiving if you had not chosen to exchange part of it for childcare vouchers). All non-statutory employee benefits will be based on your full notional salary and will not be affected by your Childcare vouchers, these include:
- any pension scheme contributions and benefits
- any salary-related pay rises and bonuses
- non-statutory redundancy benefits
Any University Maternity Pay, University Adoption Pay and University Sick Pay will be based on your full notional salary. If you receive childcare vouchers while you are on maternity, adoption or sick leave, your salary sacrifice agreement will reduce any University Maternity Pay, University Adoption Pay and University Sick Pay by the amount of vouchers you receive.
If your salary sacrifice agreement leads to your gross pay falling below the Lower Earnings Limit, your entitlement to some state benefits, such as the Basic State Pension, may be affected.
If your earnings are low and you anticipate claiming jobseekers allowance, incapacity benefit or maternity allowance in the foreseeable future, you should seek advice from Sodexo before joining the scheme.
Any statutory earnings-related benefits, such as statutory maternity pay, will be based on your reduced salary (i.e. your original salary less the value of your childcare vouchers). This means that the amount of benefits you receive could be reduced. However, if your employee benefits are higher than the statutory minimum, you may not be affected by this.
The impact on the state pension scheme is likely to be negligible. Most other pension providers are happy to accept childcare vouchers as notional pay. If you are contributing to a personal pension, you are unlikely to be affected by taking childcare vouchers, but we recommend that you seek advisement on this from your pension provider.
NHS Scheme Members – under the NHS pension scheme rules, each year of your pensionable pay counts separately towards the build-up of your final pension benefits. Therefore, entering into or continuing with any salary sacrifice arrangement (e.g. Childcare Vouchers, Lease Car Schemes etc.) that reduces your gross pensionable pay will have a negative effect on the amount of pension you are able to build up in that year. The overall effect from participating in any Salary Exchange scheme would be to reduce the amount of final benefits you build. As being in Salary Exchange scheme will have this impact on your pension benefits the University does not offer Salary Exchange for Childcare Vouchers to our NHS members.
Your tax and National Insurance savings may be affected by changes in childcare voucher legislation. Your savings may also be affected if the University makes changes to their childcare voucher scheme rules. We will provide you with as much notice as possible of any changes.
You can decide either to leave the scheme or to change the value of salary sacrifice you receive. To avoid any negative impact on your Statutory Maternity Pay/Statutory Adoption Pay, you may be advised to opt out of the scheme 23 weeks prior to the expected week of your childbirth/adoption (please speak to the HR Department for clarification). This is because your maternity/adoption pay is calculated over the 8 week period prior to the 15 week period before the expected week of childbirth/adoption. The effects should not be significant, but it is worth reviewing if you become pregnant to see what the best option for you is. For more information, please go to the University’s Salary exchange.
If you leave your job, you will continue to have access to your childcare voucher account until your account balance is zero.
In the final pay period of your employment, your voucher order will not be pro-rated if you only work for part of the pay period. However, if your pay is insufficient to cover the full voucher order then the University may override your voucher order.
If you move to a new employer and sign up for your new employer’s childcare voucher scheme, you will be treated as a post-April 2011 joiner. Depending on your earnings, your childcare voucher order may then be restricted.
If you transfer to a new employer under TUPE or if the University experiences a change of ownership, you will be treated as a continuous member of the scheme rather than as a new joiner.
The University of Exeter may decide to close their childcare voucher scheme in the event of its agreement with Sodexo being terminated. The University may, at their discretion, make alternative arrangements to enable you to continue to receive childcare vouchers.
On 28th April 2017 the government will start to roll out a new scheme called Tax Free Childcare (TFC). From April 2018, existing members of the current childcare voucher scheme will be able to stay in the existing scheme, but no new entrants to the childcare voucher scheme will be permitted from this date. Under TFC, eligible families will receive 20% of their annual childcare cost, up to a maximum of £10,000 of registered childcare, giving a maximum saving per child up to the age of 12 of £2,000 (or £20,000 of registered childcare giving a maximum saving per disabled child of £4,000 up to the age of 17).
For more information please visit Childcare Choices.
Sodexo is a proud member of the CVPA (Childcare Voucher Providers Association). The industry association was established to protect all stakeholders’ (employers, parents and childcare providers) interests by ensuring best practice by its members through security of voucher funds, integrity of data management and service levels.
Sodexo comply with all relevant data protection legislation and is committed to only using your personal data for the purposes of providing our childcare voucher services. Sodexo will never pass your information on to third parties.
The University of Exeter
Northcote House (Rm 357A)
The Queen’s Drive
Phone: 01392 722 395 (ext. 2359 internal). Monday to Friday 9am-5pm.
Sodexo Childcare Vouchers
Sodexo Motivation Solutions
Unit 5 Albany Court