Am I eligible for tax relief on childcare costs if I employ a nanny?
The government has introduced tax breaks to provide tax relief on childcare, including home-based childcarers such as nannies.
An approved nanny would have completed a Common Core Skills & Knowledge Training as well as Paediatric First Aid course, both of which Babyem provides.
For families with a joint income of up to £58,175 (or £66,350 if there is a child under 1), childcare tax credit is available to assist with the cost of using an “approved” nanny as part of working tax credits. For further information on whether you qualify you can visit www.taxcredits.inlandrevenue.gov.uk.
If your employer gives you childcare vouchers, the first £55 per week per employee is now 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 are each entitled to receive £55 per week free of tax and national insurance. For a basic rate tax payer the tax and national insurance savings on £55 per week amount to £18.15 per week and for a higher rate tax payer the relief amounts to £22.55 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 easily by your employer but there are various criteria including the scheme being available to all employees. Your Human Resources Department should have further details.
If you are a director of your own limited company and would be interested in setting up a childcare voucher scheme, you should consult with your accountant.
How to get your nanny registered by Ofsted?
Applications and renewals by nannies will be dealt with by Ofsted who will deal with the voluntary registration to the Ofsted Childcare Register (OCR).
Voluntary registration to the Ofsted Childcare Register – The registration requirements for this body are as follows:
- The applicant will need to demonstrate suitability.
- The applicant will be required to apply for a DBS check and have their identity checked.
- A certificate may be required where the applicant has lived abroad within three years of making the application.
- Ofsted will seek confirmation from applicants that they are not disqualified from providing childcare.
- The applicant will be required to hold a current paediatric first aid certificate
Ofsted charges a yearly fee of £135 for registration to the scheme. Before completing the Ofsted registration form Nannies will need to complete the following:
- First aid certificate
- Common core s kills & Knowledge training
- Nanny insurance
- DBS Check
Babyem provides all of the above services for Ofsted registration, as well as ongoing support with completing the CR1 Ofsted registration form. For more information, please click HERE.
What if the nanny I want is not OFSTED registered?
Voluntary registration with OFSTED is a relatively new scheme and many nannies are not currently registered. If you find a nanny who is not OFSTED registered, they will have to go through the registration process. All candidates are required to complete common core skills training, even if they already have a childcare qualification. This is because the common core skills training includes some modules not found in childcare courses.
They also have to hold an accepted paediatrics first aid certificate and nanny insurance. Once the nanny has all of this information, they can register on the scheme, pay, and the CRB will be applied for.
Ofsted registration takes approximately 8-10 weeks.
Who should pay for OFSTED registration?
Ofsted registration enhances nannies qualifications and professional standing, for this reason registration benefits the nanny as well as the parent. It is common practice (and considered fair) that if the parent wants to register their nanny with Ofsted they would split the cost.
For more information regarding your nanny becoming Ofsted registered and training courses, please contact 0208 986 9008 or email: [email protected]