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Nanny Tax > Nanny Payroll Newsletters > Nanny Payroll Newsletter 2005, February

NEWSLETTER FEBRUARY 2005

APPROVED CHILDCARE

Many of you have read in the press about the tax breaks that the Government are bringing in from April 2005 to assist with "registered" childcare which is to include nannies. Until recently however, there were no guidelines as to what constituted "registered" childcare (now known as approved childcare for nannies working in your home).

There are basically two types of relief that will be available. Firstly, for families with an income of under £59,000, childcare tax credit will be available to assist with the cost of using an "approved" nanny from April 2005 as part of working tax credits. For further information on whether you qualify you can visit www.taxcredits.inlandrevenue.gov.uk

Secondly if your employer gives you childcare vouchers, with effect from 6th April 2005, the first £50 per week per employee will be exempt from tax and national insurance (and employer's national insurance) provided registered or approved childcare is used. If both parents receive childcare vouchers they will each be entitled to receive £50 per week free of tax and national insurance. For a basic rate tax payer the tax and national insurance savings on £50 per week would amount to £16.50 per week and for a higher rate tax payer the relief would amount to £20.50 per week. Childcare voucher schemes can be used as part of salary sacrifice scheme or given as an addition to salary. A childcare voucher scheme can be set up quite easily by a company but there are various criteria including the scheme being available to all employees.

The Childcare Approval Scheme is a voluntary scheme for approving childcare providers and enabling parents and employers to check if a carer is approved. An organisation called Nestor has been chosen to act as the approval body on behalf of the Department for Education and Science and they will provide the approval service.

1. The nanny has to apply for approval herself and she can apply immediately although no approval will be effective before 6th April 2005.

2. In order to apply she must ensure that she has the relevant qualifications, or has attended an approved induction course. Details of the qualifications accepted and the induction courses available can be found on www.childcareapprovalscheme.co.uk/carer/qualifications.asp. For nannies from abroad, they will have to provide evidence from a verifiable source and if necessary have that evidence translated into English by an accredited translation agency, Embassy or High Commission. In view of the time it may take to verify the evidence, it may be easier to attend an acceptable induction course, details of which can be found on the above website.

3. The nanny must also hold a certificate in first aid that is suitable to the care of babies and children and is not more than three years old at the time of approval (e.g. dealing with emergencies, resuscitation, shock, choking and anaphylactic shock).

4. The nanny must complete an application form which can be found on www.childcareapprovalscheme.co.uk/application.asp. It then needs to be sent to Childcare Approval Scheme, 2nd Floor, Westbury House, 23/25 Bridge Street, Pinner, HA5 3HR.

5. There is an annual fee of £96 which can be paid by debit card or credit card by telephoning 0845 767 8111. This covers a CRB enhanced check being carried out which also includes a Protection of Children's Act list check.

For further information on the scheme please contact 0845 767 8111 or visit www.childcareapprovalscheme.co.uk

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NEWSLETTER FEBRUARY 2005

APPROVED CHILDCARE

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