Help With Nursery Fees

The weekly exempt amount for childcare vouchers (and other directly contracted childcare) set by the Government is currently £55 per week. This means that a working parent can receive up to £55 a week tax and NI free under government legislation if they use that money for approved childcare. Typically, the parent takes a salary sacrifice of £243 (calculated by the Government on the basis of 53 weeks x £55 divided by 12 and rounded up to the nearest whole pound) per month, and the employer pays that money to a voucher provider company. The parent has an account with that voucher provider and pays the money to the approved childcare provider and their fees are reduced accordingly. Parents therefore save tax and NI on that £243 each month. It applies to each working parent, i.e. Mum and Dad can both do this if they are both working. It is not 'per child'.

There are a number of voucher companies: Accor, Busy Bees, Sodexho, Virtual Vouchers, Care-4 and All Save seem to be the most popular although the actual mechanics are slightly different in each case. Speak with your employer who may be able to provide you with more information on Childcare Vouchers.

Happy Times participates in The Enterprise Day Nursery Scheme (TEDS). By joining the TEDS scheme we are able to offer parents the opportunity to save up to 35% on your annual nursery costs*. In essence your employer would pay your Happy Times fees as a non-taxable benefit in kind. Parents would then save the tax they would normally have to pay. TEDS assure us, based on over eight years' experience, that it is simple and straightforward - and that there are already many parents benefiting from this and many household names and blue chip companies operating this scheme for their employees.

As an example, and per TEDS' figures, if you are spending £6,500 a year on nursery fees you will save £1,985.82 annually or £165.48 a month (net of tax and based on a 22% rate taxpayer). The minimum fees on which savings can be made are £270.00 per month. Savings cannot be made on the TEDS Scheme for fees below this level.

As with most tax savings it is usually better to nominate the higher tax-rate payer to maximise the savings. There are some constraints on the employer but most are able to benefit from it. It is cost neutral to the employer, bar some administration to pay a monthly amount to TEDS by Direct Debit.

When you register your child with Happy Times we will provide you with the necessary paperwork to apply to join the TEDS scheme. Your potential savings will then be calculated and a savings schedule sent to you. Only when you are happy with this will the TEDS team contact your employer to arrange the contract paperwork.

Further information on the TEDS Scheme can be obtained by contacting a member of the TEDS Management Team on 01925 268743 or visit their website.

* The tax savings are based on TEDS' experience over eight years and the legal advice they have taken. Happy Times are not responsible for these calculations and have taken no legal advice on this matter. Tax legislation is subject to change and these savings may cease at some point in the future.

3 To 4 Year Old Funding

3 to 4 year old funding is a local government grant for all children in nursery over the age of 3. It is paid three times a year, (based on school terms). Happy Times apply for this on a parent's behalf and deduct it from the fees once it is received. The first application Happy Times can make is for the first term starting after a child turns 3. The amount received is approximately £81 per session up to a maximum of 5 sessions.