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Friday, 8 March 2013

Getting ready for the 2013-14 tax year

With the new tax year just around the corner, it's the perfect time to prepare your annual childcare voucher earnings assessments. Since 6th April 2011, earnings assessments have been required whenever an employee joins the scheme and at the start of each new tax year.
The higher-rate tax threshold is due to fall on 6th April, so some employees will become subject to higher-rate tax for the first time. For the purpose of earnings assessments, any employees with post-sacrifice earnings in excess of £41,450 will be considered to be higher-rate taxpayers (compared to the current threshold of £42,475). For employees who joined the scheme after 6th April 2011, this will mean that their tax-exempt childcare voucher allowance will fall from £243 a month to £124 a month.
Also, additional-rate taxpayers will become subject to a tax rate of 45% instead of the current 50%. In recognition of this, the tax-exempt voucher threshold for additional-rate taxpayers will be increased from £97 a month to £110 a month.
Further childcare news is expected in the Budget on 20th March, but meanwhile we are advising employers to make preparations to keep their childcare voucher schemes compliant. We recognise that this is a busy period for HR and Payroll professionals, so we'd like to offer a helping hand. We've produced a free guide to earnings assessments, covering areas such as:
  • Which scheme members need an earnings assessment
  • What to do about employees who are on a break from the scheme
  • How to allow for future changes, such as an agreed pay rise or a planned period of maternity leave
  • A handy calculation template
KiddiVouchers schemes are designed to make life easy for employers, so we offer the following services as standard:
  • Free earnings screening when employees register
  • Clear notifications to advise employers about new members
  • A live online account, highlighting which employees need an earnings assessment
  • An online calculator, plus hard copy calculation templates
  • HMRC-compliant recording facilities, allowing you to store and access all your earnings assessments online
  • A wide range of variations to fit in with your payroll systems
If you would like to find out more about working with KiddiVouchers, or for information on our wider employee benefits, call free on 0800 612 6110 or email business.enquiries@kiddivouchers.com.

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