Question:
I am a director of a company, and do not take a salary. I am also a partner in a partnership with a profit share in excess of £150,000. At present, I get no support for childcare costs. If I took a small salary (say, £15,000) and my company provided a childcare vouchers scheme, would I be entitled to the £55 per week tax-free exemption as the basic earnings assessment would treat me as a basic rate taxpayer (as other income is excluded from the assessment)?
Arthur Weller replies:
A new scheme for childcare is due to be phased in soon. However, both the person declaring eligibility that is responsible for the child, and their partner, must not have taxable income of more than £150,000 per year. So your partnership income disqualifies you. Under the current rules, if your employee annual earnings are £15,000 (assuming all the other conditions are complied with) then the exempt childcare limit is £28 per week.
